from the industry, a CFO and other advisors on the board who can support the specific type of business. Starting during due diligence, they meticulously work with the new CFO and management team to develop 5 year plans with specific metrics they will use for managing the business. The management team that takes this journey will typically be incentivised with significant Sweet Equity shares that will often allow them to retire should the business hit the 5 year goals they have set out. In our experience, the Private Equity directors are still very involved after the sale at a Board Level to support and guide the business. Trade Buyers - A trade Buyer has the advantage of often understanding the Seller’s business and in fact, they may be a direct competitor. They may simply be able to leverage their existing leadership team (which is probably headed up by an X-Factor Leader). Very often, they can cross-pollinate management over to the business they are buying. Sometimes they will simply be buying customers or staff and the business does not need to keep running in the current form. Operator Buyers - An operator Buyer is most often an X-Factor Leader in their own right with previous industry experience and track record running a business generally related to the sector they are looking at. They may already understand and have run a business similar to the one they are considering buying. Occasionally, they will be buying a business in a new sector and can make an agreement with the new owner to mentor them for an extended period (like 1 year +). But the one commonality is that the Operator Buyer understands that they need to be actively involved in the ‘leadership’ (versus day-to-day management) of the company. For example, they will need to spend a year to 18 months actively involved in running the business to understand it and maintain a board level leadership role afterwards.
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