Management Buyout Financing

Raising finance in this context is related to the specific purpose of securing funding for your business. This could be for a variety of reasons, including to acquire another business, for a particular growth project, to complete a management buyout (MBO) or to complete a management buy-in (MBI). The process of raising finance doesn’t need to be complicated, but it can be very time-consuming, overwhelming and expensive if you don’t know what you’re doing. This is why it’s strongly recommended that you work with a professional advisory firm, such as Accelve.

There are four crucial steps that need to be taken to ensure you successfully secure the right amount of funding for your business. These are:

1) Draft a robust business plan that considers all the key aspects of your business and its future objective/s.

2) Create an investment proposal that reflects your business plan and answers all the critical investor questions.

3) Approach the most-suited potential funders as part of a competitive process.

4) Negotiate the best terms and manage the closing process professionally.

Funders need to have complete confidence in you and your business, from the moment they are approached to the very end of the process, so it is vital that you work with a professional advisory firm that you can trust to skilfully guide you through every step.

We help any business with an EBITDA of £1 million and up, with funding needs in excess of £2 million. The business also needs to be profitable with good visibility of cash flow so that it can support the finance structure required. We also help high growth startups - see early stage startup funding section.

Over the last 20+ years of working in corporate finance, we have built up a vast number of trusted relationships with equity and debt providers across the globe, including traditional private equity, venture capital, banks, mezzanine debt, asset-based lending, as well as alternative funds, such as family offices and individual high-net-worth investors. As such, we pride ourselves on being able to source all suitable options and advising you on the best funding package for your business’s needs.

Whilst most funders will ultimately want to know and often speak to the the people running the business, they can be frustrated when they are approached directly and then have to waste time asking for missing information or discover that the business itself isn’t completely investor or lender-ready. Funders appreciate it when they are advised by a professional advisory firm as they know that the proposal will be well-prepared and that the business would have been advised accordingly. When we approach investors and lenders, they immediately know that they will be saving time and money when assessing the information we provide them. This positive first impression also helps to secure you the best terms for your funding package.

There are several reasons why some businesses aren’t successful in raising finance, with the most common ones being:

- Poorly prepared as a business for funder scrutiny

- Unable to clearly articulate your business plan

- Incomplete or inconsistent financial information, including forecasts

- Not clear on the value proposition and value drivers

- Missing information about the business’s performance and risks

- Funding proposal that doesn’t include all the required information

Ultimately, as soon as a bad first impression has been made, it becomes very difficult to gain the investor’s full confidence in you and your business and expect them to part with their money. This is why we strongly recommend that you work alongside a professional advisory firm, such as ourselves.

Yes, absolutely. Before we reach out to any funders, we make sure that you agree on who we are going to approach. This includes discussing any potential investors and lenders that you’d like us to consider. You ultimately decide who will be the preferred funder, we simply use our network and experience to suggest the most suitable backers.

We have no doubt that your investment will pay for itself (and more) in terms of saving you a considerable amount of time, money and avoidable stress. This is because you will have:

1) a much higher chance of securing your required finance to start with,

2) we will also negotiate the best terms and drive down costs, and

3) you’ll have complete peace of mind that your business will be positioned in the best possible light so that you receive the right funding package for your business.

Yes, your core management team should be able to carry on the business as usual. Potential investors and lenders will want to know that your leadership team is aligned and stable, otherwise this can pose a risk to the valuation process and therefore the finance needed.

Private equity firms tend to work closely with the management team of the businesses they’ve invested in to ensure that the company’s performance and strategic direction is constantly being reviewed, with the necessary improvements made.

In addition to the capital itself, business owners typically benefit from the private equity firm’s connections and deep sector knowledge/expertise, which helps them grow exponentially and gain more market share. On a more personal level, business owners can realise some of its value and reduce their level of engagement, yet still continue to reap the benefits of its future success.

Whilst we have specific sector knowledge as a result of the different deals we’ve made happen, we work with many different sectors, so our experience remains very diverse. This naturally means we bring unique insights to our clients, helping them to create robust business plans and completing the deals they want.

Our fees vary depending on the scope of the engagement. Our corporate finance related fees tend to have a large component which is based on the success of a transaction completing. Our strategy advice fees are normally charged as monthly retainer fees or charged on an adhoc time basis. Our fees are always tailored to your specific needs, ensuring we are completely aligned.