In this episode of the Private Equity Experience podcast, Ed and Rory dive into due diligence, a crucial step in buying or selling a business. They explain what due diligence is, how it works, and why it's essential for determining a company's valuation. The hosts also discuss the importance of working with experienced professionals, such as investment banks and financial advisors, to navigate the due diligence process and ensure a successful transaction. Learn the importance of due diligence in buying or selling a business and how to navigate the process with experienced professionals. Get tips and resources for finding reputable investment banks and financial advisors.

Show Notes:

• What is due diligence, and how does it fit into buying or selling a business?
• The importance of due diligence in determining a company's valuation
• How to conduct due diligence on potential partners or buyers
• The role of investment banks and financial advisors in the due diligence process
• Tips for working with experienced professionals to navigate the due diligence process
• Resources for finding reputable investment banks and financial advisors

01:14 Understanding the Due Diligence Process
07:14 Costs and Challenges of Due Diligence
09:08 Green Flags and Red Flags
22:34 Common Pitfalls and How to Avoid Them
28:02 Preparing for Due Diligence

Who We Are

If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.

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The Private Equity Experience podcast discusses the buy phase of private equity, focusing on the preparation required for business owners to sell their companies. The hosts, Ed Barton, Emily Sander, and Rory Liebhart, emphasize the importance of assessing one's personal and business situation, identifying motivations for selling, and assembling a team of experts, including investment banks and wealth advisors. They also stress the need for corporate hygiene, including getting financial records in order and addressing regulatory gaps. The hosts encourage listeners to ask themselves "why" and "what" questions, know their goals and motivations, and proactively prepare for the sale process.

Timestamps:

00:00 Introduction to the Private Equity Experience Podcast
00:34 Hosts' Personal Anecdotes and Fitness Talk
01:37 Preparing to Sell Your Business
03:27 Understanding Your Motivations and Goals
05:38 The Role of Investment Bankers
10:50 Assembling Your Advisory Team
19:53 Crafting Your Business Narrative
23:31 The Importance of Founder Self-Awareness
27:05 Managing Team Dynamics During Transition
33:40 Preparing for Due Diligence
34:22 Interviewing Investment Banks
36:09 Conclusion and Key Takeaways

Who We Are

If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.

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In this episode of PEX, the hosts explore the private equity selling process, comparing it to a dating game to illustrate the stages from initial teasers to detailed due diligence. They cover critical concepts like Confidential Information Memorandums (CIMs), virtual data rooms, and essential legal mechanisms such as drag and tag rights. Additionally, the discussion highlights the challenges founders face when adapting to new roles post-sale and offers practical insights into managing these transitions. Overall, the episode provides valuable guidance for navigating the intersection of entrepreneurship and private equity.

00:34 Host Banter

01:17 Reasons Founders Consider Selling

05:23 Understanding Drag and Tag Rights

12:47 Evaluating Private Equity Partnerships

17:52 Understanding the SIM Process

19:12 The Role of the CEO in Initial Meetings

20:10 Virtual Data Room and CFO Involvement

23:02 Navigating Private Equity Relationships

26:24 Challenges for Founders Post-Sale

Who We Are

If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.

Connect with Ed

Connect with Emily

Connect with Rory