10 Concepts You and I Can Learn About M&A and Creative Deal Structuring From How2Exit's Interview With Roland Frasier Investor, Business Mentor, and Strategist: Watch Here:
Here is what my team and I learned from this interview: (These are notes from team members, writers, sometimes AI, and even listeners who submitted what i learned loosely edited and shared here) - If it seems a bit unrefined, you're reading our notes, so. yeah. -Ron
Concept 1: Play A Bigger Game
In today's society, it's easy to get stuck in a rut. We often feel content with the status quo, and don't want to challenge ourselves to do more. However, if we want to reach our full potential, it's important to challenge ourselves to play a bigger game.
Roland Frazier is an example of someone who was able to do just that. Starting out as a real estate salesperson, he quickly realized that he wanted to do more than just sell one-off listings. He wanted to be able to invest in larger projects and help developers raise money. To do this, he obtained his insurance and securities licenses and started helping developers raise money.
Through his experience, he learned the power of leveraged buyouts and how they could be used to finance acquisitions. This inspired him to start looking at how he could use the same strategies to acquire businesses. He realized that if he could buy enough companies, he could exit several of them a year and receive a large amount of profit in one go.
Roland's story is a great example of how it is possible to play a bigger game. He was able to take a risk and challenge himself to do more than what was expected of him. By doing so, he was able to achieve success and financial freedom.
We can all learn from Roland's story and challenge ourselves to play a bigger game. It's important to take risks, challenge ourselves, and strive for more than what we think we are capable of. We should never be content with the status quo and should always be pushing ourselves to do more. By doing this, we can reach our full potential and achieve success.
Concept 2: Invest With Skills And Experience
Roland also discussed the opportunity available to entrepreneurs, especially with the current market inefficiencies. With 12 million baby boomers aging out of their businesses, there are thousands of deals available. However, many of these people find that they haven't built a sellable business and don't know how to professionalize it. This is where investing with skills and experience can help. By providing professional services, entrepreneurs can help these business owners make their businesses more sellable.
They also discussed the “accidental entrepreneurs” who find themselves in business without the proper training or schooling. By investing with skills and experience, these entrepreneurs can help these business owners become successful. They can help them with things such as accounting, profit and loss statements, and other financial documents. This will help these businesses become more sellable and increase their chances of success.
In conclusion, investing with skills and experience is a great way to reach our goals and achieve success. It can help entrepreneurs help other business owners become successful, as well as help them make their businesses more sellable. By using our skills and experience, we can help others and ourselves reach our goals.
Concept 3: Equity in Exchange For Value
Equity in exchange for value is a concept that has become increasingly popular in recent years. It is a way for businesses to get the expertise and assistance they need to be successful, without having to pay for it. Instead, they offer a portion of their company to the consultant in exchange for their services. This is a great way for consultants to get a piece of the company they are helping to build, and to benefit from its success.
For consultants, equity in exchange for value can be a great way to increase their income and build wealth. Instead of just taking a flat fee for their services, they can get a piece of the company they are helping to build. This allows them to benefit from the company's success, and to build their wealth over time. It can also provide them with a steady income, as they will continue to receive distributions from the company's profits.
For businesses, equity in exchange for value can be a great way to get the help they need to reach their goals. It can help them build their brand and increase their value, as well as provide them with the expertise and guidance they need to succeed. By offering equity in exchange for value, businesses can get the help they need to reach their goals, without having to pay for it.
Equity in exchange for value is a great way for both consultants and businesses to benefit. It can help consultants increase their income and build their wealth, while also helping businesses get the help they need to be successful. It is a win-win situation for both parties, and one that can help both parties reach their goals.
Concept 4: Acquire With No Money Down
One way to acquire a business with no money down is to use the “deal stack” method. This involves stacking different ways to fund the purchase, such as seller financing, an earnout, and asset-based lending. Seller financing is the most favorable option, as it comes with the least restrictions. An earnout is another way to bridge the gap between the purchase price and the amount of cash available. It involves agreeing to pay the seller a certain amount of the purchase price over a period of time, provided certain events happen. Asset-based lending is another way to acquire a business with no money down. This involves leveraging the company’s assets, such as inventory, equipment, and real estate to get the funding needed to purchase the business. Finally, revenue-based financing is an option that can provide the last bit of funding needed to acquire a business. This involves getting a loan from a lender based on the company’s income.
Using the “deal stack” method to acquire a business with no money down can be a great way for both consultants and businesses to benefit. It is a win-win situation for both parties, and one that can help both parties reach their goals. It is important to remember, however, that the success of this method depends on the company’s assets and income, so it is important to do your research and make sure that the company is a good fit for this type of acquisition.
Concept 5: Opportunity In Change
The economy is always changing, and with that change comes opportunity. As the economy trends towards recession, debt becomes more expensive, making it harder for small businesses to sell. This presents a great opportunity for those looking to acquire businesses, as sellers are more motivated to sell and there is less competition for the few deals that meet their criteria.
The “deal stack” method can also be used to acquire businesses that are owner-operated. By helping these businesses professionalize, the value of the company can increase by two to three times, as there are more buyers for professionally managed companies than owner-operated companies.
Additionally, as businesses grow from small to large, there is a tremendous opportunity to increase the value of the company. According to the latest quarter, the average across all industries valuation for a professionally managed business is only a four-point-five times.
In conclusion, change always presents opportunity, and in the case of acquiring businesses, it is important to recognize the opportunities that arise from the changing economy. With the “deal stack” method, businesses can be acquired with no money down, and with the right research, businesses can be acquired for a great value. It is important to remember, however, that the success of this method depends on the company’s assets and income, so it is important to do your research and make sure that the company is a good fit for this type of acquisition.
Concept 6: Stay As CEO For Success
Successfully acquiring a business is a great opportunity, but it is also important to remember that the success of the acquisition depends on the company’s ability to remain successful. One of the most important factors in the success of an acquisition is the continuity of management, which is why it is important to remain as the CEO of the company when it is acquired. Adam Coffey, a successful entrepreneur, is a great example of this. He successfully acquired a heat and air company five different times, and he remained as the CEO for all five acquisitions.
By staying as the CEO of the company, he was able to ensure the continuity of management, as well as the success of the company. He was able to use his experience and knowledge of the business to make sure that the company was successful, and he was able to make sure that the company was able to remain successful after the acquisition. By staying as the CEO, he was able to ensure that the company was able to remain successful and grow.
Staying as the CEO of a company after an acquisition is a great way to ensure the success of the company. It is important to remember that the success of the acquisition depends on the company’s ability to remain successful, so it is important to make sure that the company is a good fit for this type of acquisition. By staying as the CEO of the company, you can ensure the continuity of management, as well as the success of the company.
Concept 7: Acquire Resources For Growth
Acquiring resources for growth is a key component of any successful acquisition. It is important to identify the resources that will be needed to ensure the success of the company. This could include personnel, technology, and other resources. It is also important to identify the resources that are necessary to ensure that the company has the ability to continue to grow and be successful.
One way to acquire resources for growth is to look for companies that have the same goals and objectives as your own. By looking for companies that have the same goals and objectives, you can ensure that the resources that you acquire will be a good fit for your company. This will help to ensure that the resources that you acquire will be able to help your company to remain successful and grow.
Another way to acquire resources for growth is to look for companies that are willing to provide you with equity in exchange for your services. By providing equity, you can ensure that the resources that you acquire will be able to help your company to remain successful and grow. This is a great way to acquire resources for growth, as it will provide you with the ability to have a stake in the success of the company.
Finally, you can also acquire resources for growth by offering a consultation service. By offering a consultation service, you can ensure that the resources that you acquire will be able to help your company to remain successful and grow. This is a great way to acquire resources for growth, as it will provide you with the ability to help your clients to solve their problems and get the resources that they need.
In conclusion, acquiring resources for growth is an important part of any successful acquisition. It is important to identify the resources that are necessary to ensure that the company has the ability to remain successful and grow. There are many ways to acquire resources for growth, such as looking for companies that have the same goals and objectives, providing equity, and offering a consultation service. By utilizing these methods, you can ensure that the resources that you acquire will be able to help your company to remain successful and grow.
Concept 8: Identify Acquisition Criteria Systematically
One of the most effective ways to identify acquisition criteria systematically is to use a quadrant analysis. This method involves taking an inventory of the things that you are interested in, the skills and experience that you have, the superpowers that you possess, and the connections that you have. By doing this, it will become easier to identify the best resources that can help your company to grow. Additionally, you can use an income analysis to determine the size of the EBITDA or the profit of the business that you are looking to acquire. This will help you to narrow down the list of potential acquisitions to those that are most suitable for your company.
Once you have identified the best resources for your company, you can then look for organic sources. This involves telling everyone that you know what you do and what you are looking for. Additionally, you can look for centers of influence that have the people that you need, such as attorneys and lawyers. You can also use systematic methods, such as Sales Navigator, Zoom Info, or Crunch Base, to find potential acquisitions that meet your criteria. Finally, you can use automated systems, such as mail houses and automated ringless voicemail, to contact potential acquisitions.
In summary, identifying acquisition criteria systematically is an important part of any successful acquisition. By utilizing a quadrant analysis and income analysis, you can narrow down the list of potential acquisitions to those that are most suitable for your company. Additionally, you can use organic and systematic methods to find potential acquisitions. By taking the time to identify the best resources for your company, you can ensure that your acquisition is successful and helps your company to grow.
Concept 9: Negotiate Creative Deals
Negotiating creative deals is a key component of successful acquisitions. Whether it is a purchase or a merger, the negotiation process can be complex and requires careful consideration. It is important to be prepared for negotiations by doing research on the company and its financials, as well as understanding the terms of the deal. Additionally, it is important to be creative in the negotiation process. By thinking outside the box and exploring different options, you can often find a deal that is beneficial for both parties.
For example, I recently negotiated a deal with the owner of a publishing company. Initially, the company was looking for a valuation of ten million dollars. However, due to some key personnel leaving, I was able to negotiate a deal for a million dollars, which was a 70 percent discount in the valuation. This was a great deal for both parties, as I was able to get a 33 percent stake in the company at a fraction of the cost. Additionally, we were able to structure the deal so that I paid four hundred thousand dollars upfront and then two hundred thousand dollars annually for the following three years. This allowed me to pay off the four hundred thousand dollars from the profits of the company, while still having an extra one hundred and sixty thousand dollars left over.
Overall, negotiating creative deals is an important part of the acquisition process. By taking the time to research the company and explore different options, you can often find a deal that is beneficial for both parties. Additionally, by thinking outside the box and being creative, you can often find a deal that is even more beneficial than originally thought.
Concept 10: Take Risks To Succeed
Taking risks is an important part of any successful venture. Without risk, there is no reward. It is important to remember that taking risks does not always mean taking a gamble. Instead, it means being willing to think outside the box and explore options that may be less conventional. This is especially true when it comes to negotiating deals.
When it comes to negotiating a deal, it is important to do your research and make sure that the deal you are entering into is one that will be beneficial for both parties. It is also important to be aware of the potential risks that come with any deal, and to make sure that you are prepared to handle them. Additionally, it is important to be willing to take risks and to explore creative options. By taking the time to think outside the box, you can often find a deal that is even more beneficial than originally thought.
Finally, it is important to remember that taking risks is an important part of any successful venture. Without risk, there is no reward. By taking the time to research and explore different options, you can often find a deal that is beneficial for both parties. Additionally, by being willing to take risks and think outside the box, you can often find a deal that is even more beneficial than originally thought. Taking risks is an important part of any successful venture, and by being willing to take risks and explore creative options, you can often find a deal that is even more beneficial than originally thought.
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