When to start the Grooming process to ensure a successful exit?

1. GROOMING FOR EXIT
PART 2
STAGE 1: START NOW
The Rudder Group
Growth Strategies & Mentor Capital

2. GROOMING FOR EXIT
This presentation is designed to help shareholders add
value to business through a structured grooming process,
gauge the right time to consider an exit, identify most
appropriate exit route, and ensure they achieve best deal
for themselves, their staff, and company itself.
The Rudder Group
Growth Strategies & Mentor Capital

3. THREE COMMON STAGES OF THE GROOMING PROCESS
Now • Complete an initial business
diagnostic
What • Agree on the ultimate objectives
How • Implement plan to make things
happen
The Rudder Group
Growth Strategies & Mentor Capital

4. STAGE 1: FORMULATE THE STRATEGY “NOW”
• Start to formulate the strategy
2 – 3 years from desired exit
• Allow 6–18 months to get business
into shape
• Assume 6 months to complete the
sale process
• Expect 6–12 months of
employment with purchaser
THE TIME WILL FLY BY!
The Rudder Group
Growth Strategies & Mentor Capital

5. STAGE 1: FACTORS AFFECTING VALUATION TODAY
BENCHMARK THE VALUATION TODAY
AND SET A REALISTIC TARGET VALUE
• Current and forecast revenue, profit
and cash flow
• Visible population of strategic
partners, with appetite to buy
• Scope of buyer to derive synergistic
benefits
• Scarcity value and market position
• Comparable private and public
companies’ valuations
The Rudder Group
Growth Strategies & Mentor Capital

6. STAGE 1: ESTABLISHING THE VALUE
REVENUES X MULTIPLIER = VALUE OF TECHNOLOGY BUSINESS
(MULTIPLIER IS A FUNCTION OF PERCEIVED GROWTH VS. PERCEIVED RISK)
• Grooming reduces risk and increases
growth potential
• Independent valuation provides a
comfort level and a reality check
• The “true value” is the most attractive
offer received from several serious
purchasers
• Not from just one offer
• Highest offer received can be significantly
higher than the lowest bid by as much as
50%
The Rudder Group
Growth Strategies & Mentor Capital

7. THE GROOMING FOR EXIT SERIES
• Part 1: What is Grooming
• Part 2 When to Begin
• Part 3: What to Do
• Part 4: Implementation
The Rudder Group
Growth Strategies & Mentor Capital

8. GROWTH STRATEGIES & MENTOR CAPITAL
THE RUDDER GROUP ACCELERATES OUR CLIENTS:
• Time To Market
• Time To Revenue
• Time To Positive Cash Flow
• Time To Exit
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www.theruddergroup.com The Rudder Group
Growth Strategies & Mentor Capital