Third Annual Series on Business Exits

Prepping the Princess for the Party: Is Your Business Ready to Sell?

(Part I of VI): The Right Investment Banker is Key; GrowthPoint Technology Partners (Silicon Valley)


This week on “In Process: Conversations about Business in the 21st Century,” we begin our third annual series of podcast episodes dedicated to the topic of preparing and selling your business.

This year we have structured our “exit series” as a virtual event with a new downloadable book available once the 6th podcast episode is released on the dedicated website

According to a 2019 business trends study, 48% of business owners who want to sell, have no exit strategy. Exit planning is essential to get the highest value for your business. Many business owners are unprepared to sell:

  • 58 percent have never had their company appraised;

  • 48 percent have no formal exit strategy;

  • 37 percent have no structures in place to shield cash proceeds

In the first installment of our six-part podcast series, Trusted Counsel speaks with GrowthPoint Technology Partner’s Managing Director Vijay Rawat about how to find the right buyer for your business in the broad universe of prospects. GrowthPoint Technology Partners is a Silicon Valley based technology investment bank that provides financial and M&A advisory services to technology companies.

Rawat believes this is a fantastic time to consider a sale for most types of companies and there are a number of factors that are driving technology M&A. “One factor is that private-equity groups have raised a record amount of money and they need to put that money to use. Secondly, the public market is at an all-time high despite trade tensions with Mexico and China. Lastly, large companies have trillions of dollars of cash on their balance sheets (earning low returns) and they need to put that money to use.”  

It is critical for business owners to educate themselves about valuation and the underlying business considerations that buyers are typically looking for. According to Rawat, education and preparation creates a solid positioned seller. If owners decide to sell their businesses―but haven't made a commitment to learn and prepare―it will be difficult to market their business and  attract the right buyer.

Our third series is rich with substantive recommendations and current transactional examples and includes conversations (and a physical and electronic book of information) on:

  1. choosing an investment banker with GrowthPoint Technology Partners,

  2. the wealth growth, philanthropy and other personal planning and structures founders and other owners in the business should consider prior to the sale with Wilmington Trust,

  3. the financial analysis, tax and accounting planning and actions businesses must take in connection with preparing for the exit with Aprio,

  4. ) the legal planning and process to expect with Trusted Counsel’s tax and mergers/acquisitions colleagues, and

  5. the planning and 20/20 hindsight in connection with actual transactions courtesy of Trey James, co-founder and former CEO of Xcentric Group, LLC which sold to Right Networks, and Peter Paglia, the former COO of OnBoard Security which sold to Qualcomm earlier this year.

The hot market for M&A continues with businesses looking to deploy and invest substantial cash. With tax reform and growing cash reserves, no red flags of it slowing down. But while the M&A outlook is positive, a considerable number of transactions still fall short of achieving the results business owners envisioned. Companies and private equity firms often place the blame on external factors, but more and more, they are recognizing the need for more effective due diligence and earlier preparation to ensure that revenue projections materialize.

During the course of the podcast, entrepreneurs, business owners and C-level executives will learn about:

  • How companies can ensure deal success through process and procedure

  • Factors that could impact M&A activity in the year ahead

  • The difference between a financial buyer and a strategic buyer

  • Factors that make a business sellable

  • Three categories of buyers along with challenges and opportunities for each

Learn more about our virtual event by clicking here. Understand the steps involved with retaining an investment bank’s services by streaming the conversation in its entirety in the player below, or download it to your mobile device via iTunes. Don’t miss a single episode, subscribe to our show “In Process Podcast” on iTunes to receive this episode as well as future episodes to your smartphone.

Legal Landmines Savvy Entrepreneurs Can Dodge

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In this episode of In Process Podcast: Conversations about Business in the 21st Century, Trusted Counsel’s John Monahon talks with Trusted Counsel colleagues Allen Bradley and Valerie Barton about some of the most common legal landmines often encountered by clients and their thoughts on how to sidestep them. In Monahon’s view, entrepreneurs are usually so busy focusing on building a business, sometimes they overlook basic legal coverage which enhances the value of the company. For example, not putting restrictive covenants on employees of your organization, or not protecting your intellectual property. We recorded this podcast episode to help you understand the ways in which the law is a tool that can help you capture value and prevent costly problems (such as additional legal or litigation fees) down the road.

#1. Put restrictive covenants in employment contracts
Simply put, a restrictive covenant is a clause in an employment contract which prohibits the employee from competing with the company, or from solicitation of customers or employees for a specified period upon termination.

#2. Get intellectual property transfer/assignments from independent contractors
Under the law, an independent contractor owns what he or she develops, writes or makes. So when working with independent contractors, it’s important to have him or her transfer the work over to you, the owner of the business. The transfer assignment occurs through a signed contract that the independent contractor signs, ideally at the start of the project.

#3. Identify and protect copyrights, patents and trademarks
Failing to trademark the company name could cost millions of dollars for future protection or could mean losing the rights should another party “steal” the name, or copy the product. The legal process of trademarking exists to send out a formal notice that a business is declaring exclusive rights to the name. Hence, trademarking the company name and product name is smart and proactive.

#4. Issue equity in a timely manner
It’s important to issue stock at the time of grant because procrastination could result in larger legal and tax fees down the road. For example, if equity is promised when the company is at the start-up stage and has a low value, postponing issuance translates into paying taxes based on “phantom income” as the company moves to the next stage which creates a higher value.

#5. Review letters of intent with legal counsel
Savvy entrepreneurs see the importance of involving legal counsel during the initial letter of intent review. Barton states, “oftentimes I’ll receive a letter of intent that has been fully executed and I think to myself, oh my gosh, I could have provided invaluable suggestions prior to mutual execution including an asset purchase as opposed to a stock purchase. Sometimes, clients do not know which purchase is better for their business, and as legal counsel, I am fully equipped to explain the difference and why I would recommend one versus the other.”

#6. Be aware of tax landmines like phantom income problems
Property such as stock can create income when there is no cash to pay the tax.

#7. Equity rollovers are often not tax free
Typically, rollover equity is taxable because the IRS takes the position that rollover equity is income. But there are various exceptions to the general rule, and there are ways to document it so that the rollover equity is tax free so that no tax is paid on the phantom income, the value of the rollover equity.

#8. Take advantage of Research & Development (R&D) Tax Credits
The R&D Tax Credit remains one of the best opportunities for businesses to reduce their tax liability. The R&D Tax Credit is for businesses of all sizes. Industries which may qualify for the R&D Tax Credit include but are not limited to Manufacturing & Fabrication, Software Development, Engineering, Food Science, and Chemical & Formula.

#9. Tax law changes: stay up to date
Taxes should be reviewed periodically as they frequently change which could result in structural adjustment. Another benefit of a periodic tax review is staying abreast on growth of the company. Most likely, the current tax election will no longer be applicable if the company has grown to a multimillion-dollar business.

#10. Put a limited liability company operating agreement or shareholder agreement in place!
The state of formation dictates requirements for entering into an operating agreement. In the world of corporations, the operating agreement is called the shareholder agreement. One of the primary reasons an operating or shareholder agreement is important is to agree upon and document rights, obligations and procedures, should disputes arise. Documented agreements will address and help resolve disputes.

During the podcast CEOs, business owners, and C-level executives will learn:

  • Legal landmines to avoid

  • A few ways to avoid paying large tax fees

  • Commonly confused legal terms

Don’t miss a single episode of our podcast show. Subscribe to our show “In Process Podcast” on iTunes and now of Google Play to receive this episode as well as future episodes to your smartphone.

Hobby Apps Can Lead to For Profit Enterprises

“When a visually impaired kid starts playing an audio game, he’s now the leader amongst his sighted peers. It’s a new social experience for them.”

“When a visually impaired kid starts playing an audio game, he’s now the leader amongst his sighted peers. It’s a new social experience for them.”

In this episode of In Process Podcast: Conversations about Business in the 21st Century, Trusted Counsel’s John Monahon speaks with Marty Schultz, a successful technology entrepreneur with a background in software engineering, about Blindfold Games, an app development company he founded in 2014. “The idea was a result of the App Club, an after-school program I was teaching at my daughters’ school,” Marty told us. “The kids wanted to build a game. I agreed to do the programming and demonstrate how games are designed. The caveat, since I was programming was that it had to be different and more interesting than other games.” And it was. Today, more than 25,000 visually impaired people of all ages from around the world enjoy the wildly successful Blindfold Games series of games. Perhaps more importantly, Marty leveraged what he learned with building a new for profit enterprise.   

 So, how does a visually impaired kid living in a digital world actually play a game on their smart device? Through sound from the device. The first game in the Blindfold Racer series is car racing game where the players rely on their hearing versus their sight to play. The concept, Marty explained is simple in that the user uses their device like a steering wheel. If you steer too far left, the sound, typically music, increases in your left ear bud as your indicator to adjust the device to the right. And if the music gets too loud in your right ear bud, you need to steer the device more to the left. Scoring is also based on sound.  A winning sound could be popping popcorn while losing sounds could be hearing annoying barking dogs.   

Prior to adding the first game to the app store, the game concept was tested with about fifty volunteer blind testers from around the world. Over the course of eight weeks, the game was updated through various iterations. An aha moment was when one of the testers said that sighted people would think that the device is broken if the screen is black during the game.  As a result, screen animation became a key element. The same child who was behind the aha moment, named the game Blindfold Racer.

Over time, teachers of visually impaired students learned about these games from their students, and as a result, started using the games in their classrooms to teach their students skills since students with vision impairments struggle to get a solid K-12 education. The games provided teachers a tool to focus on skills missing from a solid education. Marty received feedback from teachers with ideas for new educational games. He also received feedback to broaden his games to special needs students that have conditions such as autism, ADD, and Dyslexia. He immediately dove into market research and he and his team soon formed a new company, ObjectiveEd.

This summer, ObjectiveEd (the new company) plans to close their Series A investment round. Marty said, “Even though the blind community is relatively small, all our innovations apply across the board and we realized impairments are not a small problem.” 18.5% of American children under the age of 18 are Special Needs Children. And according to World Report on Disability, approximately one billion people in the world are living with a disability, with at least 1 in 10 being children. ObjectiveEd believes they can provide amazing technology to have a huge impact on visually impaired, special needs, and other disabled children’s education.

What kind of feedback is your business receiving from clients? Is there opportunity to broaden your business services, or how about going through a business transformation? How is the market changing and how is your business filling in the gap? And lastly, can your business have any type of social impact? Food for thought.

During the podcast CEOs, business owners, and C-level executives will learn:

  • How ideas become technology

  • Marty’s process for research and testing

  • How a “hobby” company can identify for profit business ideas

Don’t miss a single episode of our podcast show. Subscribe to our show “In Process Podcast” on Apple iTunes and on Google Play to receive this episode as well as future episodes to your smartphone.

California Here We Come! Preparing for the California Consumer Privacy Act

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In this episode of In Process Podcast: Conversations about Business in the 21st Century, Trusted Counsel’s Evelyn Ashley and John Monahon speak with Michael Jones, Attorney at Trusted Counsel  who has a strong background in business-oriented technology. Michael previously spearheaded Trusted Counsel’s initiative to help clients understand and comply with the European Union’s General Data Protection Regulation (GDPR) and now he’s at the helm of California Consumer Privacy Act (CCPA), slated to go into effect on January 1, 2020.

CCPA is the most comprehensive data privacy bill to pass in the United States at a state level. It requires significant transparency for companies regarding customer data and to date, it’s the toughest privacy law in the country. This law is spreading to other states. Michael says, “ultimately there will be federal legislation, or there will be so many states that pass their own laws that businesses will have to comply with the broadest one .”     

Today, businesses in affected sectors face challenges when it comes to privacy and security compliance because of the requirement to establish a process to identify, secure, delete, and/or manage files that pertain to customer personal data. Most organizations who seek to “go at it alone” will not do it well because doing so requires a combination of skills, with legal and compliance analysis leading the way. Businesses should prepare now with the help of legal privacy specialists. We have compiled a best practices list on what activities your business should be doing between now and January 1, 2020. If you are already complying with GDPR, you’re ahead of the game but there is still work to be done. 

Note: your company’s specific situation may vary from these general scenarios and further research may be needed.



  • Understand what personal information your business collects

  • Update your data inventories (the database to track your database processing activities) in order to prepare for data access, deletion, portability requests, and to comply with opt-out requests

Privacy Notices and Policies

  • Draft the required notices and disclosures “at or before the point of collection” informing customers of the categories of personal information that is being collected and for what purpose.

  • Determine if your business will maintain one privacy notice for California residents, one for other consumers, or have one universal policy.

Consumer Rights

  • Consumers have the right to know, right to request, right to opt out, delete, and the right to not to be discriminated against.

  • Implement protocols to ensure new consumers rights. Are you building out the process, training and have new systems for responding to consumer demands? What does your roll-out look like?

Third Party Service Provider

  • To comply, if you have a third-party vendor that processes your data you need to update and negotiate your contracts

Systems, Training, and Process

  • Increase your budgets for IT reprogramming costs and build process around responding to consumer demands, including protocols for deleting data.

  • Due to penalties involved, take the time to train your employees on handling customer inquires

During the course of the podcast CEOs, business owners, and C-level executives will learn:

  • The definition of the CCPA

  • Recommendations for best practices for your business on compliance

  • Understand what is meant by “intentional data privacy”

  • Final thoughts from Trusted Counsel on why every business should comply

How We Can Help

Contact us at 404.898.2900 or email us at to set up a consultation to discuss your company’s situation.

Don’t miss a single episode of our podcast show. Subscribe to our show “In Process Podcast” on Apple iTunes and on Google Play to receive this episode as well as future episodes to your smartphone.

Read the Transcription

Be sure to check out Michael Jones on another podcast episode where he discussed General Data Protection Regulation (GDPR) and answers questions about it and data privacy.

The Nuts and Bolts of Selling your Business: Due Diligence

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In this episode of In Process Podcast: Conversations about Business in the 21st Century, Trusted Counsel’s John Monahon and Valerie Barton (filling in for Evelyn Ashley) speak to Dan Bradbary, Founder and Managing Partner of PMI Advisors. An accomplished entrepreneur, speaker and author, Bradbary has extensive experience with founding and selling various businesses. He founded PMI Advisors in 2017 upon recognizing the under-served needs of mid-market companies regarding post-merger integration. Since its founding, PMI Advisors has expanded practice to other phases of business management and operations, ranging from business continuity planning, sale preparation, business process optimization and divestiture and carve out.  

According to Bradbary and PMI Advisors, when preparing a business for sale, the Owner/CEO needs to approach the exit strategy with the same focus and drive that helped to build the business. Hence, an Owner/CEO who is “ready” with an attractive business will greatly improve their probability of a successful business exit.

PMI Advisors recommends the following key steps for a successful exit:

Hire a consultant who specializes in M&A
Selling a business is a complex process. A consultant will guide business owners through the steps that often include some sort of readiness assessment, plan development, implementation and value optimization.

Have a transition team
Having a transition team is favorable because they will work alongside you to address all issues involved with selling a business. There will be tax planning needs, legal compliance and succession plans that might need to be put into place. Once you have your transition team in place, schedule an introduction “kick off” meeting. 

Structure your advisory board
An advisory board does not have the legal tethering like a board of directors has – it’s more informal and easier to assemble. It’s comprised of qualified subject matter experts that have knowledge of your industry and specialties in areas such as technology, marketing, sales, operations or human resources. They offer suggestions and non-binding recommendations about key elements to make sure your business is attractive to buyers.

If you receive an unsolicited offer - engage with your legal counsel right away
It is very exciting to receive an offer, but Bradbary warns, “you don’t need to rush into signing a letter of intent.” The main area of concern is that once the letter of intent is signed, the business is taken off the market for several months. You need to be prepared to be locked in during that time period.

By taking these key steps you will be well on your way to drastically improve your probability of a successful exit. Be sure to listen to the entire interview below.

During the course of the podcast CEOs, business owners, and C-level executives will learn:

  • The PMI Advisors process when assisting business owners looking to sell

  • What is meant by having an emergency operations plan

  • The difference between an advisory board versus a board of directors

  • Post-sale final thoughts

Don’t miss a single episode of our podcast show. Subscribe to our show “In Process Podcast” on Apple iTunes and on Google Play to receive this episode as well as future episodes to your smartphone.