Dec 8, 2008 - Web Host Boot Camp Slides (Final)
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Dec 8, 2008 - Web Host Boot Camp Slides (Final)

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Slides for Frank Stiff's & Hillary Stiff's Dec 8, 2009 presentation on "Transaction Success" issues at Web Host Boot Camp.

Slides for Frank Stiff's & Hillary Stiff's Dec 8, 2009 presentation on "Transaction Success" issues at Web Host Boot Camp.

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Dec 8, 2008 - Web Host Boot Camp Slides (Final) Dec 8, 2008 - Web Host Boot Camp Slides (Final) Presentation Transcript

  • Common “Transaction Success” Issues when Selling or Buying a Hosting Company Frank Stiff & Hillary Stiff C HEVAL C APITAL, I NC. [email_address] [email_address] www.chevalcap.com
  • Disclaimer
    • This presentation is for discussion purposes and is not financial advice or a comprehensive discussion of the issues involved.
    • THE PURCHASE OF ASSETS OR BUSINESSES IS RISKY. SMALL BUSINESSES ARE OFTEN DEVELOPMENT STAGE OPPORTUNITIES WITH SIGNIFICANT FINANCIAL, TECHNOLOGICAL AND OPERATING HURDLES TO OVERCOME. PURCHASERS HAVE A MEANINGFUL RISK OF LOSS OF THEIR ENTIRE PURCHASE PRICE.
    • Please be sure to consult your financial and legal advisors when valuing a company, considering the sale or purchase of a business or making other financial decisions.
  • Agenda
    • Who we are
    • What is “transaction success” when buying or selling
    • Buyer “transaction success” issues
    • Seller “transaction success” issues
    • Where a broker/banker helps
    • Q&A
  • Background – Cheval Capital
    • Who we are
      • Investment bankers active in hosting/ISPs since 1996
      • Completed over 150 Hosting/ISP acquisitions including transactions such as the Endurance/iPower merger
      • Member of FINRA (formerly NASD) and SIPC
    • What we do
      • Represent buyers & sellers of internet, telecom and related companies
      • Distribute a weekly listing of sellers, creating a deal marketplace for small and mid sized companies
    • Who we have worked for
      • Endurance Int’l Group, Rackspace, Hostopia, Midphase, Jumpline, Verio, etc. plus many other smaller companies.
  • What is “transaction success”
    • For Sellers: Getting paid what and when you expect to be paid
    • For Buyers: Buying what you think you are buying.
    • Understand the pros/cons/risks
    • A timely process
    • Any surprises are minor
    • A “successful” transaction for the other party
  • Buyer “transaction success” issues
    • Experience, Discipline and Commitment
    • Understanding what you are buying
      • Profitability & Cash Flow
      • Recurrence
      • Type
      • Accuracy
      • Customer existence & quality
      • Employees
      • Hidden liabilities
  • Buyer “transaction success” issues (cont.)
    • Migration & operation of the business
    • Getting what you need to run the business
      • Domain names, brands, servers, routers, website, software licenses, people, etc
    • Good purchase agreement
    • Planning
    • “Transaction success” for the other side
  • Seller “transaction success” issues
    • Focus, Organization, Commitment
    • Who you are selling to
      • Do they have the money
      • Have they made acquisitions before
      • Do they have good references
      • What is the likelihood that they will close
      • Can they migrate/run the business
      • How big are they.
      • “ Dumb money” vs “Smart money”
    • Distraction from your business
  • Seller “transaction success” issues (cont.)
    • What you are selling
    • Good purchase agreement
    • “Transaction success” for the other side
  • Where a broker/banker can help
    • Established practices for buying/selling
    • Market prices & standard terms
    • A source of prospective buyers or sellers
    • Experienced negotiator
    • Ideas on how to solve problems and bridge valuation gaps
  • Summary
    • Successful sellers/buyers focus upfront on the details
    • Gain experience or hire it (or both)
    • It is in your interest for the other side to have “transaction success”
  • Questions? [email_address] [email_address] www.chevalcap.com
  • Disclaimer
    • This presentation is for discussion purposes and is not financial advice or a comprehensive discussion of the issues involved.
    • THE PURCHASE OF ASSETS OR BUSINESSES IS RISKY. SMALL BUSINESSES ARE OFTEN DEVELOPMENT STAGE OPPORTUNITIES WITH SIGNIFICANT FINANCIAL, TECHNOLOGICAL AND OPERATING HURDLES TO OVERCOME. PURCHASERS HAVE A MEANINGFUL RISK OF LOSS OF THEIR ENTIRE PURCHASE PRICE.
    • Please be sure to consult your financial and legal advisors when valuing a company, considering the sale or purchase of a business or making other financial decisions.
  • Common “Transaction Success” Issues when Selling or Buying a Hosting Company Frank Stiff & Hillary Stiff C HEVAL C APITAL, I NC. [email_address] [email_address] www.chevalcap.com