More than 20 Boston area companies have been acquired so far this year. Almost all were privately held. When you are acquired, it’s not just a life-changing liquidity event, it’s validation of your business model and a hard-earned reward for your ideas and long hours.
In the big deal, you’ll receive cash, stock and/or incentives to continue working. Then what?Based on my 30 years of experience working with fortunate business sellers, here are three capital R’s to guide you.
If you already use a discretionary investment advisor, now is a good time to revisit why you chose that person and whether they are a good fit going forward. Perhaps you are now outside their range of experience and expertise. Or their fees no longer make sense given the size of your account.
If you have never used a discretionary investment manager, now may be the time. As you probably found in building your business, specialized expertise can make all the difference. Think $1m, then $10m, then $100m. At what level do you stop doing it yourself, or doing it haphazardly? Only you know.
Go shopping and compare investment advisors. Ask the same 6 Questions of all candidates and evaluate answers. The 6 questions will quickly reveal real (and important) differences between the brand name broker-dealer types (Merrill, Goldman, UBS) and registered investment advisors (like Osbon Capital). Based on your takeover publicity, you’ll probably get many unsolicited offers to meet. Take a few meetings, for fun and education.
Now is the time to assemble, direct and coordinate your wealth trinity – investment advisor, tax expert, and trust expert. Maybe an insurance provider is called for, but most of that can be done low cost via the internet these days. Consider these steps:
- Plan for the future you want, including tax impact – how much do I pay and why?
- Update wills, perhaps create trusts
- Revisit titling of accounts, individual, joint, powers of attorney, beneficiaries, IRAs, 401ks, HSAs, and so on. Now is the time to plan for spouses, companions, family members, charities, and you
- Transfer risk through insurance planning until you have all the money you need and want
Keep it simple
It’s easy to be overwhelmed by the many changes in your business and personal life triggered by an acquisition, not the least of which being the sudden appearance of liquid money where once there was just a piece of paper and anticipation. I’d add another R at this point: Relax. You have plenty of time to figure it all out if you listen to yourself, listen to others and use your best judgment. That’s how you got here in the first place.
PS: Here are three traps to avoid as you put your plans in place.
Don’t overspend ($10,000 solutions for $100 problems)
Don’t over-plan (I’ll fix it now, for forever!)
Don’t over-control (I will still be in charge from beyond my grave)
John Osbon – email@example.com
This communication may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.”
“Historical performance is not indicative of future results. The investment return will fluctuate with market conditions.
Past performance is not indicative of any specific investment or future results. Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor.
Investment strategies, philosophies, allocations and holdings are subject to change without prior notice.
This communication is intended to provide general information only and should not be construed as an offer of specifically tailored individualized advice.
While the Adviser believes the outside data sources cited to be credible, it has not independently verified the correctness of any of their inputs or calculations and, therefore, does not warranty the accuracy of any third-party sources or information.
Adviser does not endorse the statements, services or performance of any third-party vendor.
Unless stated otherwise, any mention of specific securities or investments is for hypothetical and illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable.
Any IPO alerts are purely informational and should not be construed as recommendations to invest.
Adviser is not licensed to provide and does not provide legal, tax or accounting advice to clients. Advice of qualified counsel or accountant should be sought to address any specific situation requiring assistance from such licensed individuals.
Any case studies or hypothetical client profiles are for demonstration purposes only. They illustrate the breadth and depth of the many clients we represent at various life stages. Any similarities to actual Adviser’s clients past or present are strictly coincidental. Individual advice and results will vary based on each client’s circumstances, objectives and prevailing economic conditions.