DealQuest Podcast with Corey Kupfer Corey Kupfer

The wealth management space demands experts who not only understand its intricacies but also prioritize the interests of those they represent. Enter Jessica Polito, a seasoned professional who has dedicated her career to offering M&A advice exclusively within the wealth management realm. Recognizing the need for a shift from the conventional investment banking paradigm, Jessica founded Turkey Hill Management in 2021. Jessica is shaking up the M&A landscape, especially in the wealth management space. With Turkey Hill Management, Jessica is sidestepping the traditional investment banking model. By not charging success fees, she is revolutionizing how M&A advisory services are provided. THE UNCONVENTIONAL MODELTraditional investment banking relies heavily on success fees, but Jessica has chosen to sidestep this tradition. This is both brave and innovative. She attributed this decision to low overhead costs and the idea of aligning purely with the fiduciary she represents. Jessica’s model ensures that the M&A advice is given without the shadow of a large success fee lurking behind. This keeps the advice pure and in the best interest of the client. Jessica clarified that her focus is genuine wealth management. The size of the firm isn’t a strict criterion as long as it falls within her expertise. Broker-dealers and alternative investments, for instance, aren’t in her wheelhouse. INVESTMENT BANKING DEMYSTIFIEDInvestment bankers play an essential role in crafting a company's presentation, ensuring it's attractively packaged for potential buyers or sellers. Beyond that, they're deeply involved in the bidding process, deal structuring, valuations, and much more. The overlapping roles between attorneys and investment bankers can sometimes blur the lines, but the good ones seamlessly bridge that gap. In Jessica's experience, there isn't much difference between the role of traditional investment banks and boutique firms like hers. Whether you're on the buy-side or the sell-side, the processes and procedures are comparable, with the primary focus being on due diligence, negotiations, and ultimately reaching a signing point. A PEEK INTO THE WEALTH MANAGEMENT M&A LANDSCAPEFocusing on the wealth management space, we've seen an upward trend. With numerous deals across industries, the wealth management sector has emerged as a significant niche. Despite some initial headwinds, like fluctuating interest rates and unpredictable stock markets, the optimism remains buoyant. Investment banking and wealth management M&A is as dynamic as it is intricate. With evolving trends, shifting market dynamics, and the never-ending quest for differentiation, the journey is as rewarding as it's challenging. It's a dance of numbers, negotiations, and nuances. And for those in the midst, keeping the bigger picture in view can often be the difference between a deal closed and a deal lost. •

For my full discussion with Jessica Polito, and more on this topic and others discussed:Listen to the Full DealQuest Podcast Episode Here•

FOR MORE ON JESSICA POLITO:https://www.linkedin.com/in/jessica-polito-421b763/www.turkeyhillmanagement.comCorey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast. If you want to start getting yourself deal-ready, check out the DealQuest Podcast with Corey Kupfer each week. Featuring industry leaders and newcomers as guests alike, the DealQuest podcast has something for everyone.

DealQuest Community, on this episode, I’d like to delve into a crucial aspect of deal-making that can be both an art and a negotiation: Determining when and what information to share with potential deal partners. Balancing transparency with confidentiality is essential, and this decision-making process involves attorneys, accountants, and strategic evaluation.

 

THE NECESSITY OF NON-DISCLOSURE AGREEMENTS AND BEYOND

While Non-Disclosure Agreements (NDAs) are one solution, they may not cover all scenarios. Certainly, NDAs are a common first step to safeguard sensitive information, but they may not be enough. Proving a breach and enforcing the NDA can be challenging, and some deal partners may find ways to use general knowledge or publicly available data to gain a competitive advantage.

 

Every industry and deal is unique, making it essential to customize your information disclosure strategy accordingly. While you wouldn't disclose client names and contact information until a definitive agreement is in place, other non-identifiable data, such as pricing, revenues, and general business models, can be shared earlier in the process.

 

It's crucial to be cautious, however, when sharing details about proprietary aspects of your business, such as pricing structures or unique billing methodologies. While potential partners may need some level of information to evaluate the deal's potential, there are aspects you should hold close until you've reached a certain stage of negotiation.

 

THE ROLE OF DUE DILIGENCE

As a deal progresses, you'll eventually need to provide comprehensive due diligence information, listing material contracts, detailed financials, regulatory licenses, and more. However, investing significant internal and external resources into due diligence should be done when there's a high likelihood of finalizing the deal.

 

Successfully navigating deal information disclosure requires a thoughtful and strategic approach. Customizing your disclosure strategy based on your industry and deal specifics, engaging in transparent discussions with potential partners, and seeking professional guidance will enhance your chances of striking the right balance. Remember, dealmaking is a fascinating journey that requires a combination of science, art, negotiation, and careful consideration.

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 Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

 If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

In the world of Software-as-a-Service (SaaS), mergers and acquisitions (M&A) have become an essential strategy for growth and market consolidation. Lowell Ricklefs is the CEO and founder of Traction Advising, a company that specializes in helping B2B SaaS companies with more than $5 million ARR get acquired. Lowell's impressive career includes roles as a startup co-founder, CEO, Chairman, COO of a public company, and Global VP of a Fortune 500 company.

 

With experience as a global mentor, investor, board member, and CEO coach, Lowell is well-equipped to share his expertise on M&A and getting the best value for your business. All of his knowledge and experience compounded, Traction Advising was born out of Lowell's frustration with the traditional investment banker model, prompting him to share valuable insights on maximizing M&A deals for businesses seeking acquisitions.

 

UNDERSTANDING THE SAAS DIFFERENTIATOR

In the world of mergers and acquisitions, SaaS companies present a distinct landscape compared to traditional businesses. As Lowell knows all too well, these tech-driven enterprises place paramount importance on their future potential and scalability. Unlike conventional businesses that heavily rely on historical financials to make their case, SaaS companies leverage their promise of future growth to entice potential buyers.

 

This forward-thinking approach enables buyers to be more open to investing in the untapped potential of a SaaS company, shifting the focus from the past to the possibilities that lie ahead. In this blog post, Lowell shares valuable insights into navigating the unique dynamics of SaaS company acquisitions, empowering entrepreneurs to capitalize on their businesses' future prospects and secure lucrative deals.

 

THE POWER OF PERSPECTIVE

It is important to understand the motivations and perspectives of both buyers and sellers. In the world of M&A, deals are not just numbers on a spreadsheet; they involve real people with their own emotions, desires, and goals. A successful deal requires a deep understanding of what drives each party and how their objectives align or diverge.

 

As a seasoned dealmaker, Lowell recognizes the need to put himself in the buyer's and seller's shoes, as well as other key players, such as board members or senior executives. This approach helps in understanding the motivations and concerns of each party and finding common ground for a successful deal.

 

THE CURRENT MARKET LANDSCAPE

As with any market, the SaaS M&A landscape is subject to fluctuations. While the market experienced a surge in deal volume over the past few years, some softening of valuations has been observed. Both strategics and private equity investors are more cautious, with a focus on profitability and conservative investment strategies. Lowell predicts a rise in deals involving a mix of cash and stock, as companies seek to bundle their assets to roll up and create larger entities.

 

The world of SaaS M&A continues to evolve, presenting exciting opportunities and challenges for tech companies seeking growth and expansion. Understanding the unique dynamics of the SaaS space, being proactive in strategy and storytelling, and creatively overcoming obstacles are essential elements for success. Lowell's experience and insights serve as a beacon of guidance for entrepreneurs and businesses looking to navigate the ever-changing landscape of SaaS M&A.

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FOR MORE ON LOWELL RICKLEFS:https://www.linkedin.com/in/lowellricklefs/https://www.tractionadvising.com/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessme

On this episode of the DealQuest Podcast, I’m excited to bring you a renaissance man of SaaS finance and accounting – Anthony Nitsos. With an impressive and diverse background in manufacturing process improvement, large-scale ERP implementations, and controllership of a Japanese company (which  achieved a remarkable 10x revenue growth in just three years), Anthony’s expertise is unparalleled.

 

Anthony serves as a fractional CFO for numerous SaaS startups, contributing to two unicorn exits. As founder of SaaS Gurus, Anthony and his team specialize in automating and optimizing every aspect of startups' finance and accounting operations, setting them up for rapid scaling, maximized cash flow, and valuation. SaaS Gurus really is a one-stop shop for all things SaaS finance and accounting.

 

THE HARD START OF THE STARTUP WORLD

The path to success in the startup world is filled with challenges, and one of the most critical hurdles is due diligence. For tech startups seeking venture backing or potential acquisitions, undergoing meticulous due diligence is inevitable. This process requires startups to demonstrate their financial health, growth potential, and operational efficiency.He draws from his wealth of experience to highlight the intensity of due diligence, particularly when startups are acquired by public companies. Teams of experts scour every aspect of the business, leaving no stone unturned in their quest to identify potential risks or issues. As Anthony explains, the due diligence process can be overwhelming, especially for startups seeking funding in the B or C round, where significant investment amounts are involved. 

Anthony emphasizes the concept of "highest and best use" in a startup context. Founders and CEOs must channel their time and energy into areas where they excel and add the most value to the company. By zeroing in on their special sauce, they can drive growth and innovation, leaving other tasks to capable team members or automating processes.

 

THE HIDDEN POWER OF BACKEND OPERATIONS

There is a profound impact that efficient backend operations have on a startup's ability to get deals done, which include securing favorable valuations, and attracting potential investors. While founders and CEOs concentrate on core competencies and sales growth, they often underestimate the power of seamless backend processes in driving value and attracting interest from stakeholders.

But there can be pitfalls to look out for. Many startups encounter backend challenges that can hinder growth and lead to deal breakdowns during due diligence. By proactively addressing issues such as cash flow management, insurance planning, and data integration, startups can build a strong foundation for success and avoid unnecessary complications down the road.

By prioritizing financial planning, efficient operations, and strategic decision-making, founders can create a solid foundation for long-term success, attracting investors and potential partners to the table. SaaS Gurus' expertise in this realm has garnered them a well-deserved reputation as trusted advisors in the tech startup ecosystem. As startup founders and CEOs embrace the deal-making mindset and seek expert guidance, they will undoubtedly unlock the full potential of their ventures and pave the way for a successful and fulfilling entrepreneurial journey.

 

FOR MORE ON ANTONY NITSOS:https://www.linkedin.com/in/Antonynitsos/https://saasgurus.io/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

In the world of mergers and acquisitions, due diligence plays a critical role in ensuring the success and sustainability of a deal. It involves scrutinizing financial data, examining operational aspects, and identifying potential risks and opportunities before finalizing an agreement.

 

Bill Wiersema, an experienced audit principal with Miller Cooper, is a highly regarded M&A advisor specializing in closely held middle-market businesses and private equity groups. With a wealth of experience and expertise, Bill is sought after for his innovative approaches in accounting, tax, and M&A matters. He prides himself on staying up to date with the latest industry trends and regulations, providing clients with valuable insights and solutions that align with their best interests.

 

THE ART OF PROBING AND EXPERIENCE

The world of due diligence is a fascinating blend of detective work and forensic accounting. Due diligence is an art form that demands experience and expertise. Bill draws an analogy between due diligence and probing a wall to find weak spots. Similarly, due diligence professionals must carefully probe and question data to identify potential issues and risks. It's an art that can't be mastered overnight; rather, it comes with years of experience in dealing with complex financial scenarios.

 

One of the key challenges in the due diligence process is striking a balance between the need for detailed information and the practicality of maintaining deal momentum. It is important to keep the process efficient, while ensuring that all crucial aspects are thoroughly examined. Decisions on how deep to go in due diligence require careful consideration, as spending too much time may delay the deal, and too little may lead to undiscovered risks. The key lies in smart resource allocation and identifying critical areas that demand further examination.

 

THE EVOLUTION OF DUE DILIGENCE

In the past, sellers were sometimes hesitant to provide detailed information to buyers, especially when dealing with larger entities. Due to high-profile corporate scandals such as Enron and WorldCom, however, buyers now demand more transparency and thoroughness in due diligence. The shift in perception has resulted in a positive change, as buyers now understand the importance of comprehensive due diligence in making informed decisions.

 

Apart from financial aspects, due diligence also involves evaluating cultural compatibility and employee welfare post-closing. Sellers are increasingly concerned about their employees' well-being and whether the buyer's company culture aligns with theirs. Buyers with a track record of treating employees well and maintaining a positive work environment often gain an edge over financial buyers solely driven by the bottom line.

 

Transparency and comprehensive documentation have become vital in building trust with buyers, especially in deals involving larger entities. As the world of M&A continues to evolve, due diligence will remain a critical aspect in determining the success of deals and ensuring the interests of all stakeholders are safeguarded.

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FOR MORE ON BILL WIERSEMA:millercooper.comhttps://www.linkedin.com/in/billwiersema/

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

 

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

DealQuest Community, as we reach the midpoint of 2023, it's time to take a closer look at the state of the deal market. We'll explore the key trends and factors influencing deal-making in various sectors during the first six months of the year. From venture capital funding to mergers and acquisitions, and even the real estate market.

 

2023: THE UPS AND DOWNS

Most certainly, in 2023 there have been ups and downs that warrant careful analysis. I’d like to share some specific numbers that happened in the first half of 2023:


Venture capital funding in the second quarter of 2023 experienced a 33% decline in the number of deals compared to 2022, with investment dropping by approximately 50%.
Despite the overall decline, Artificial Intelligence (AI) stood out as a hot sector, attracting around $40 billion in investments for AI startups during the first half of the year.
Global mergers and acquisitions (M&A) activity saw a significant 36% decline in the second quarter of 2023 compared to the same period in 2022.
The total value of M&A deals also dropped from $1.14 trillion to $733 billion.
Leverage buyouts are facing challenges due to the higher cost of capital, leading to decreased volumes for private equity-led buyouts by 59% and sponsor-led buyouts by 56%.
Mega deals valued at $25 billion and above have been scarce, impacting overall market statistics.

 

There is a lot to unpack with these numbers, so definitely don’t miss the full podcast episode to get the full breakdown.

 

HEALTHY OPTIMISM & NEW OPPORTUNITIES

There is no doubt the first half of 2023 has seen its fair share of challenges, but it's evident that cautious optimism is prevailing among market participants. Entrepreneurs, investment bankers, and other professionals remain generally optimistic about the market's future. Although some sectors have experienced setbacks, many are still witnessing growth and opportunities. The stock market's recovery, a strong job market, and easing inflation provide reasons for hope. It’s essential, however, to approach deals with a balanced perspective, considering potential risks and rewards.

 

As we navigate the second half of 2023, keep your eyes on sectors that continue to attract significant investment. AI remains a hot topic, with substantial funding pouring into AI startups. Other areas, such as logistics, technology, and healthcare, also experienced growth during the pandemic and continue to offer opportunities for investment. Additionally, real estate may present intriguing prospects, especially in commercial segments where valuations have adjusted.

 

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Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
 

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!