Do you know how to choose an M&A lawyer that will help you succeed with your liquidity event?
If you think your existing business lawyer is the one to paper your deal, think again.
Your business lawyer and an M&A lawyer are both lawyers, but this is where the similarities end.
Depending on who you speak to, up to 90% of deals in Mergers and Acquisitions (M&A) fail. A large contributing factor is business owners selecting the wrong lawyer.
When it comes to your liquidity event, you have one chance to get it right, and you better make it count.
Who am I, and how do I know?
I was that kid who started his eLearning business right out of school with no money, experience, or team. I had no business being in business, and the results showed.
My grit and passion kept me in the game long enough to experience success. Success brought an unsolicited offer from an experienced, sophisticated, and savvy buyer.
The unsolicited offer was 7-figures and based on three times EBITDA. I said “no” to the unsolicited offer and “yes” to mastering the art and science of a liquidity event.
Two years later, I said “yes” to a different buyer with a 9-figure offer based on 13-times EBITDA.
Today my company helps business owners prepare for their liquidity event. The end goal is showing business owners how to increasing enterprise value.
Going back to my story, how did I increase my enterprise value 10X and go from 7-figures to 9-figures?
Keep reading.
Why Size Matter When Selecting Your M&A Lawyer
Better be wise by the misfortunes of others than by your own – Aesop
When selecting an M&A lawyer, does size matter?
Yes, size does matter when it comes to the deal size of your liquidity event.
The M&A lawyer that you select as part of your exit team must have extensive experience with deals of your size.
Read and prosper from “Assembling Your Exit Team? How To Crush It And Win.”
Here’s a question for you.
How do you create massive enterprise value?
If you said enterprise value happens from the liquidity event process, think again.
Massive enterprise value happens from your preparation for your liquidity event.
An essential aspect of your preparation is selecting the right advisors.
Find an M&A lawyer who specializes in deal sizes within your range.
If your deal size is $50M, find an M&A lawyer who has a successful track record with $50M deals. If your deal size is $250M, find an M&A lawyer who has a successful track record with $250M deals.
Don’t believe for a moment that all M&A lawyers are the same. Find an M&A lawyer who both specializes in your industry and with your deal size.
All deals are not the same, and the size of the deal has different sets of issues.
Identifying your M&A lawyer is the start of your process, but not the end. Do you know the next question you must answer before hiring your M&A lawyer?
Keep reading.
Why You Must Avoid An M&A Lawyer Whose Law Firm Plays A Staffing Bait And Switch Game
Honesty is the first chapter in the book of wisdom – Thomas Jefferson
Show me your exit team, and I’ll tell you your business future.
When it comes to selecting an M&A lawyer, don’t fall into the trap of buying into the firm’s reputation itself.
Why?
It’s M&A lawyer from the firm, and not the firm itself, that is sitting at the deal table. The lawyer and not the firm is who is representing you.
You can hire the best law firm in the world, but you’re exit team, and your deal, is only as good as the individual.
When selecting an M&A lawyer, ensure that the law firm does not play the staffing bait and switch game.
What’s the staffing bait and switch game?
You hire the “big guns” of the law firm, and instead, you end up working with the junior lawyers for your deal.
How do you avoid the staffing bait and switch game?
Ask the right questions of both the firm and clients of the firm.
Your five to thrive are:
- Will the team that starts the transaction be the same one to finish it?
- Tell me about the specific details for the role of each team member?
- Can you confirm the entire team that will be part of my transaction?
- Who will work daily with myself, my team, and the other side?
- Who is the project manager?
Smart business owners leverage the above questions for all advisors selected.
Next up, do you know what traits you need with an M&A lawyer?
6 Traits You Need In Your M&A Lawyer To Help You Thrive And Prosper
The art of the deal is the art of communication. – Jeffrey Feldberg
There are six traits to look for when selecting your M&A lawyer.
At the top of the list are communication skills. The smartest lawyer is no match for a lawyer who is an effective communicator.
The art of the deal is the art of communication. How your M&A lawyer communicates can make or break your deal.
When selecting your lawyer, find one with exceptional negotiation skills. A talented negotiator finds ways to ensure everyone gets what they want.
The third trait to look for in an M&A lawyer is the advice provided throughout the process. Remember, your M&A lawyer is there to protect you from you. The right advice puts you on a path to success.
The fourth trait to ask references is to find out if there were any surprises. An experienced M&A lawyer protects you and your deal by finding and removing any unwanted deal items.
For the firth trait in selecting your M&A lawyer, do you find one that is a generalist or specialist?
Find an M&A lawyer who specializes in your industry. The right non-competes, indemnity, escrows, and intellectual property come from a specialist.
The sixth and final traits are how the types of answers the M&A lawyer provides. Are the answers you receive sensible and rational, or instead, general and based in theory?
When it comes to hiring an M&A lawyer, you need to ask this one question. Do you know what it is?
Keep reading.
The Importance Of Knowing The Transactions Costs Today, Instead Of Tomorrow
If you can’t explain it simply, you don’t understand it well enough – Albert Einstein
In life and business, timing is everything.
Knowing what your M&A lawyer charges upfront is not a nice to have, but instead, is a necessity.
There’s a reason why the cost of legal services is not at the top of the list.
The best “deal” in the world from an M&A lawyer who lacks the skills can cost you the deal. In this scenario, you are better off not doing anything. Remember, you have one chance with your liquidity event and you better make it count. In the process, you’ll save yourself both time and money.
Overpaying an M&A lawyer for services you could have received for less isn’t any better of a situation.
Your preparation includes establishing the costs for each member of your exit team. Your M&A lawyer is no exception.
When selecting your M&A lawyer, ensure you know your costs upfront.
In asking about the costs of an M&A lawyer upfront, you’ll find out the total cost of services or provided an hourly rate.
While it’s good to know the hourly rate, ask for an estimate of the total costs from start to finish.
If either the total cost or estimate for the costs is too high, keep on looking.
Your exit team ensures your deal gets done, and as necessary, you keep as much of the money as possible.
A seasoned M&A lawyer who specializes in your specific area will know what the costs are before starting.
Successful business owners know the costs in advance, and so should you.
Do you know the one trait that your M&A lawyer must have before you make your selection?
Keep reading.
Why Chemistry Can Make Or Break Your Deal
Personality is to a man what perfume is to a flower – Charles M. Schwab
In business and life, the so-called small things are, in reality, the big things that matter.
The M&A world pits buyers against business owners. Most buyers hope you’ll make mistakes. Each mistake you make lines your future buyer’s pocket with your hard-earned money.
Read and prosper from “5 Unbelievably Stupid Exit Team Mistakes That Buyers Want You To Make.”
The right M&A lawyer can help to prevent mistakes, but you need the right chemistry.
If you don’t have chemistry with an M&A lawyer you’re considering, keep looking. It doesn’t matter if you checked the boxes for the other four selection items.
Ready for a simple reality check to find out if you have the right chemistry with your future M&A lawyer?
Imagine you are embarking on a 10-hour airplane ride. Sitting next to you is the M&A lawyer you’re considering. Are you looking for a parachute, or do the 10 hours feel like an hour?
The process of a liquidity event is exhilarating on the one hand and stressful on the other.
Your goal is not to survive the process but to thrive. The right M&A lawyer can transform the “impossible” into “I’m possible” for your deal.
But, and it’s a big one, you need to have the right chemistry with all your advisors so you can win the day.
Having great chemistry with your M&A lawyer gives you the edge, and at the same time, makes the process enjoyable.
Conclusion
A successful liquidity event is as much art as it is science. It’s little wonder that up to 90% of M&A deals fail.
Most business owners believe the value of their business comes from the process. In reality, the value of your business comes from your preparation.
Think of the preparation for your liquidity event as the key that unlocks business value.
Your M&A lawyer plays a critical role in the liquidity event. The right person can help turn your dream into reality. On the flip side, the wrong M&A lawyer can turn your dream into a nightmare.
When it comes to finding your M&A lawyer, where do you start, and what do you do?
Start with the first strategy and stay with it until mastered. Do the same for the remaining four strategies.
After my 9-figure exit, I’ve made it my mission to pay-it-forward. I’ve done the heavy lifting by spending the money and time, so you don’t have to.
Today, I help business owners get the edge for their liquidity event. Mastering both the art and science of preparation helps you secure your future.
When it comes to your liquidity event, you have one chance to get it right, and you better make it count.
Put the odds in your favor when you know how to find and select the right M&A lawyer.
Here’s to you and your success!
Your Biggest Raving Fan,
Jeffrey Feldberg
Today, Feldberg's passion is helping you extract your deep wealth. The 90-day Deep Wealth Mastery program helps create a solid foundation for three areas: increasing profits to enterprise value and optimizing post-exit life. Deep Wealth Mastery offers strategies and insights drawn from Feldberg's rich experience. The strategies from the trenches get results. Jeffrey's vision is to increase the social fabric of society one entrepreneur at a time.
Learn more through https://iapdw.com/prosper
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