Its a no brainer 4
Expansion and Exit James Cowper Kreston Corporate Finance has accumulated a vast amount of expertise and knowledge from our involvement in technology sector transactions. Through a deep understanding of the sector we have the ability to add real value to your business offering understandable and practical advice to your business. Our Corporate Finance team have many years experience advising clients to help:
1. Funding the technology business
A key issue for any technology business is how to meet an identified funding requirement so that the business can reach the next stage of its product development.
The identification of a funding requirement, ideally over a year before it is needed, is one of the key outputs of a business plan. It is important to regularly update financial forecasts to allow the management team time to raise funds before a lack of funding becomes critical to the business.
Once a funding requirement has been identified there are several different types of funding, the suitability of which will depend where in its lifecycle the business is. It is important in deciding to approach only one individual or entity for funding to have carried out your research properly so you ensure you only approach those whose investment criteria you fit. Options for funding can include:
- Grants
- Equity
- Friends and Family
- Business Angels
- Venture Capital
- Debt Financing
- Business Relationship Funding
2. Acquisitions
Some companies will have, as part of their strategy, a policy of acquisition of other businesses in similar or complementary areas of trade. The acquisitions may be opportunistic or the result of searching.
Irrespective of the way in which the acquisition originates, the process of acquisition is likely to be broadly similar.
How James Cowper Kreston Corporate Finance help:
- Obtaining an offer
- Heads of terms agreed
- Due Diligence
- Finalisation of contracts
3. Exiting the Technology Business - Trade Sale
The majority of successful technology businesses will be looking to achieve an exit for the investors in the short to medium term. This will typically be by way of either a trade sale or flotation.
It is common that in technology businesses the potential trade purchaser will have been identified almost at inception. If this isn’t the case the management team should start to plan for the sale of the business at least a year before the anticipated exit date. The planning stage is crucial as if it is executed properly it will have a significant impact on the way any proposed buyer views the business.
For example, if a business is not properly structured, does not produce regular and reliable management information and is unable to produce signed copies of key documents, any potential purchaser is unlikely to be reassured that the business has been well managed. This will increase the level of perceived risk attached to the company and will reduce the price any purchaser is willing to pay.
How James Cowper Kreston Corporate Finance help:
- Finding and Approaching Prospective Buyers
- The Information Memorandum
- Heads of Terms
- Due Diligence and Contract Negotiations
- Completion
- Taxation
4. Exiting a Technology Business - Floatation
A stock market flotation involves selling a percentage of the company’s share capital on one of the stock markets. There are three stock markets in the UK. The largest and best known is the main market of the London Stock Exchange (“LSE”) which is generally populated by large companies. Two smaller exchanges are the Alternative Investment Market (“AIM”) and PLUS-SX, both of which are specifically designed for smaller companies.
How James Cowper Kreston help
- Do You Really Want to Float?
- Preparing to Float
- Appointing Professional Advisors
- Choosing the Correct Market
- Flotation Price
- The Flotation Process
- Taxation
For more information please click to our How to Guides