WCF Advisors Blog

How to Monetize Your Business Without a Complete Sale

Nov 08, 2017
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Market Insights
Most business owners understand that an exit strategy should include maximizing their return on investment (ROI). Traditionally, business owners sought out two strategies to do this: Developing a dividend stream (annual cash flow) that pays increasing amounts each year as the business grows Selling 100% of the business and reaping the capital gains However, more and more middle market companies are choosing a recapitalization path as a means to distribute cash to their owners without an...

What’s Your Company Worth? An Introduction to Advanced Planning for Business Owners

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Oct 05, 2017
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Market Insights
For many owners of closely held businesses, their business is their retirement plan — understandably, saving for retirement can often take a backseat to investing more capital in the business, and the proverbial retirement-planning can gets kicked further down the road. Though an eventual sale of their business interest may provide a windfall large enough for long-term financial security, it’s still essential for business owners to understand the value of their company, now and in...

Strategic Buyers Pay up for Opportunities

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Sep 21, 2017
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Market Updates
The M&A market is somewhat a tale of two markets, large and small. While the middle market ($50M to $500M in deal value) has remained relatively stable, mega deals ($500M in deal value and above) have dominated in terms of volume and value. The number and value of mega deals have increased year over year in 2017, while middle market deals have trended slightly behind and lower middle market deals have declined. Similar to what we reported last quarter, total deal volume in the United States...

Crowdfunding for Capital? Know the Rules.

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Aug 25, 2017
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Market Insights
Consider the traditional approach to securing business financing: Armed with your valuable idea, a sound business plan, and some marketing research, you strive to get an audience with some wealthy investors, perhaps angel funds, a venture capital firm, and a few investment banks. You spend a great deal of time and effort pitching to this very limited pool of capital investors, with uncertain success.  Now consider a current popular approach called crowdfunding: You pitch your valuable idea...

M&A Market in Wait-and-See Mode

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Jun 14, 2017
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Market Updates
After a few years of robust merger and acquisition activity, policy uncertainty has the market poised for a temporary breather. There are some mixed signals from the first quarter (Q1) of 2017. For starters, overall M&A activity in the United States started relatively modestly in 2017 according to Pitchbook, at least in contrast to the past few years. However, transaction multiples edged up to a multi-year high. The increase in valuations is likely a result of the...

A Step Toward Normalcy?

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Mar 01, 2017
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Market Updates
If 2015 was a record year, perhaps 2016 was the year we began to see a return to normalcy in the M&A market as deal activity receded. The beginning of a retrenchment may be evidenced by emerging trends including a flight to quality, reemergence of platform value, and a greater reliance on equity capitol as a funding source for M&A. Private equity transaction volumes involving deals between $10 million and $250 million fell by 23.5% and 11.1% on a quarterover- quarter and year-over-year...

Surveying the Value of Investment Bankers

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Jan 01, 2017
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Market Insights
It’s not uncommon to encounter business owners who are selling their companies yet are hesitant to engage the help of investment bankers. Oftentimes those owners believe they can replicate the banker’s service without having to pay a fee. In contrast, there are those owners who have engaged investment bankers to lead the sales process and found that the value they received from their advisors far outweighed the fees paid. To be sure, there have been numerous studies that clearly bear...

Strategic Buyer and Private Equity Demand Driving Middle-Market M&A Activity

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Dec 01, 2016
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Market Updates
Market data indicates that U.S. merger and acquisition deal activity decreased in September, going down 5.4% with 1 ,005 announcements compared to 1 ,062 in August. However, aggregate M&A spending increased. In September, 28.3% more was spent on deals compared to August. Over the past three months, the sectors that have seen the biggest declines in M&A deal volume, relative to the some three-month period one year ago, have been: Technology Services (439 vs. 575), Commercial Services (452...

Is the Balance of Power Shifting Away From Sellers?

Sep 01, 2016
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Market Updates
Middle-market M&A activity declined 31% year over year (YOY) in volume through August 31, according to S&P Capital IQ. In the first eight months of 2016, only 1,523 transactions were closed, compared with 2,194 over the same period in 2015. While expected, this decline represents a significant pullback from the historic M&A levels of 2015 and 2014. Although many still consider the present environment to be a sellers' market, this may signal the beginning of a change in the balance of power...

The Market Takes a Breath

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Jun 01, 2016
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Market Updates
Middle-market deal flow paused in Q1 2016 as buyers and lenders took harder looks at potential deals. While corporate balance sheets hold approximately $1.5 trillion in cash, according to Federal Reserve data, and private equity funds collectively hold dry powder of $534 billion, per Pitchbook, strategic and PE buyers have refocused on quality companies given rising valuations combined with uncertainty in the U.S. macro environment. GF Data's latest report indicates private equity transaction...

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