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Showing posts with the label management

What is a Roll-Up?

Roll -Up is a type of Merger&Acquisition strategy. It happens when smaller companies in the same market or industry sector are merged into one large entity. Reasons for consolidation include economy of scale, expanded geographical coverage, better name recognition and increase in value. Merger of smaller companies happens in fragmented industries where there is no dominant company or where is one dominant player and none of the small companies can challenge its dominance. Usually it is the private equity firm that does investment thesis, using analysis to identify target companies for an acquisition. If you as an owner want to buy more smaller companies and merge them into one entity the deal is most often done as a combination of cash and equity in exchange for ownership stake at the acquired company. Before the deal is done there are several very important questions that need to be answered. Are the target companies good match? What additional products/services/value...

Private placement memorandum

Private placement memorandum also known as offering memorandum is the most important document for any private company that is raising capital. Such sale of stock, bonds or other securities directly to selected private investors is called private placement. Unlike company that is raising capital via traditional IPO and becomes publicly traded, company that utilizes private placement remains private. Private placement memorandum can be compared to prospectus in public offerings and its purpose is to provide prospective buyers with needed information. Offering memorandum gives in depth look at business and its operations explaining nature of business, terms of investments, potential risks and management among other things. Sometime it can be compared to thorough business plan but there is a difference. Business plan often has marketing purpose created to promote the company and attract investors. On the other side private placement memorandum is more factual and descriptive in t...

Why is business plan important?

If you are starting a business, having a business plan is a must but it is also important if you already have established business. The biggest mistake is to see business plan as something static, with time it will change just like your business. In the growth phase good  plan will help you with forecasting sales and raising capital. Later, it can help you to see what goals you have accomplished and what new ones you need to add. Your business plan must be well thought so it represent your company in the best possible way. Good written business plan let others know that you are serious and that you can handle all that running a business requires from you. There are couple of necessary elements that your business plan needs to have: executive summary,  business/industry description, market analysis, competitive analysis, sales and marketing strategies, organization management, operating and financial plan including funding requirements. The executive summary is the ...