Liquidity … Without Waiting for an IPO or M&A Event

July 14, 2015 / By Stern Ventures / Comments 0


One of the biggest growing pain for a company is shareholder fatigue.

What is “shareholder fatigue?”

Previously enthused investors may have been strong supporters of your company, however their time horizon has reached its limit. Such shareholders are looking for an expedient exit that may not be in the best interest of long-term shareholder and the company as a whole.

What’s worse is being forced to hold onto your illiquid assets waiting around for an IPO or M&A event … on someone else’s timeline.

Is there a way to monetize your illiquid assets now … on your own 6-9 month timetable?

Thankfully, the answer is yes. And that’s exactly what I’m going to walk you through in today’s post … the six stages of liquidity.

in fact, this is precisely the process we use in all our engagements, but the stages are universal so you can easily apply them to your own strategic plan or liquidity advisor.

(1) Consultation & Engagement

  • Define and assess your strategic objectives
  • Execute engagement agreement

(2) Pre-Underwriting Preparation

  • Conduct advisor due diligence
  • Develop and present strategic plan
  • Meet with stakeholders
  • Perform valuation analysis

(3) Deal Packaging & Underwriting

  • Prepare targeted marketing material:
  • Confidential Information Memorandums (CIM)
  • Complete Business Plan
  • Targeted Teasers & Pitches
  • Organize financial statements & pro forma documents
  • Set up supporting documents in a digital data room

(4) Deal Placement & Distribution

  • Identify 150 to 300 strategic targets for investment partnership
  • Focus distribution on qualified institutional investors
  • Identify and pitch to select investors

(5) Negotiation & Due Diligence

  • Secure letter of intent and indication of interest
  • Evaluate term sheets from investors
  • Conduct comprehensive investor due diligence
  • Control and monitor access to an exhaustive digital data room
  • Foster “competitive tension” among multiple bidders

(6) Closing

  • Draft closing documents
  • Obtain final approvals
  • Coordinate legal advising
  • Close transaction
  • Distribute funds

[This is only the outline for the article. Please check again for the full content. We intend to publish 1 article every month.]

Share on FacebookShare on LinkedInShare on Google+Tweet about this on Twitter

Leave a Reply

Your email address will not be published. Required fields are marked *