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The Stock Market is “Plunging” But There is No Panic in the Private Company Business World

With oil prices dropping briefly below $40 per barrel on Friday (August 21, 2015) and the stock market dropping sharply in the recent past, investors in the public markets are being advised not to panic. The headline for the front page of the Saturday/Sunday Edition of The Wall Street Journal (August 22-23, 2015) reads “Stock Plunge Picks Up Speed.” In light of the circumstances, what happened to the value of closely held and family business in America over the last week?

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So Many Questions a Business Owner Must Ask re Ownership and Management Transitions

So many questions that a business owner must ask. And answer, if he or she hopes to have successful management and ownership transitions and a successful business end game that prepares him or her for the rest of life. Many of the questions are interrelated and the answers to some will influence the answers to others. I pose the following questions as a starting point for discussion between owners, their families, their key employees, and their advisers. At the conclusion of the questions, I suggest that you can begin to work on answers by examining your buy-sell agreement. That process will get you in the mode of asking and answering critical questions during the interim time between now and your business end game that will insure that you transition ownership and management smoothly and prepare for the rest of your life.

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Where Do You Want the Ownership of Your Company to be in 3, 5 or 10 Years?

Part Two

This is the second in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduced the Ownership Transfer Matrix. In the this concluding post, we dive deeper into the ownership question.

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Where Do You Want the Ownership of Your Company to be in 3, 5 or 10 Years?

Part One

This is the first in a two-part series: Where Do You Want the Ownership of Your Company to be in 3, 5, or 10 Years? In this first post, we introduce the Ownership Transfer Matrix. In the concluding post, we dive deeper into the ownership question.

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When is the Right Time for Management Transition?

When I read about Uber’s most recent financing, which valued its equity at $51 billion, I thought about FedEx Corporation, a Memphis-based company.  I then wrote a blog post titled Uber Market Cap of Equity Exceeds that of FedEx.  This past week, my thoughts about FedEx turned towards AutoZone, another Memphis-based company, as well as […]

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Would You Rather Sell up to Half Your Company to Get Liquidity or Engage in a Leveraged Dividend Recapitalization and Keep All of it for Your Owners

Recently I spoke with a business owner who had almost sold about half of his company to a private equity investor a few years ago.  The facts will be changed in this story so that neither he nor I should be able to recognize his company.  However, the conversation highlights a potential opportunity for owners […]

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Interim Time and Your Business End Game

Preparing for the End of One Thing and the Beginning of the Rest of Your Life

This post introduces the concept of “interim time,” which is the easily lost time between two critical goal posts in the life of a business owner, his or her current status quo and their business end game. It is, after all, what we do during this interim time that prepares us not only for our inevitable business end games, but also for the rest of our lives.

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10 Good Reasons for Private Company Dividends

The issue of whether private companies should pay dividends is an important one. Many private company business owners (and boards) resist paying dividends because they desire to retain flexibility at their companies and do not desire to incur risk from leverage (or slower ability to repay debt). The interesting thing about this position is that it creates polar opposite effects on private companies and their shareholders. What follows are ten good reasons to consider paying private company dividends and five things that some folks say represent the downside.

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The $4 Trillion Opportunity for Business Ownership Transition

A decade ago, Richard Jackim and Peter Christman wrote a book entitled The $10 Trillion Opportunity.  The second edition had the subtitle of “Designing Exit Strategies for Middle Market Business Owners.” While the book did provide a guide for financial advisers working with middle market business owners, I don’t recall that it provided a basis for […]

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Uber Equity Market Cap of Equity Exceeds that of FedEx

On Friday, I read a headline that said that, based on a recent round of financing in which $1 billion was raised, the equity capitalization of Uber is about $51 billion. I thought that was staggering, since I knew that Uber was only a few years old and, well, that’s a lotta value. Its investors included Microsoft and the Times Internet Group of India per the Wall Street Journal.