4 Acquisition International - M & A Awards 2022 Oct22615 Best U.S. Small & Medium Business Buyer 2022 Founders Trust works with founders and owners who are looking to sell their small- and medium-sized privately held companies. These individuals have spent decades building their companies; developed them, grown them, and now it is time to exit. Some are ready to retire, others enjoy what they do and would like to continue doing some of the work – but they don’t want ownership weighing on them anymore. We take a closer look at how Founders Trust ensures the long-term success of each of the companies it buys, while also preserving their values, teams, and independence. Founders Trust is a big admirer of founders. People that start from scratch, people who essentially begin their business journey with nothing. Most of the time, they don’t even know the business that they are getting into, and they don’t have any connections from the start. But over time, they build a great business, often with a lot of personal sacrifices. They bring jobs to many employees who are able to grow personally and professionally and support their families. They help numerous clients, whose lives are enhanced by receiving great products or services. The time comes that the founder has worked all these years, and it’s time for him to exit and to pass the baton. To do that successfully, he has to do it early enough that he has time for a successful transition. Some founders want to exit and retire; others want to exit and continue working in the company without the weight of ownership. This is where Founders Trust comes in. CEO of Founders Trust, Matt Williamson says, “We believe that businesses have intrinsic value, and they should continue to grow and succeed.” Mr. Williamson says, “Business owners build their companies from nothing. We have respect for these people. And we’re here to help them achieve their exit. They deserve to see their work and what they believe in, to continue on. And the employees deserve to grow and be successful. We give a part of the ownership to all of the employees, and we incentivize them. We support companies for success and growth, and give companies what they need to do that.” Usually, buyers belong to two categories, the ‘strategic’ and the ‘financial’ buyers. ‘Strategic’ buyers typically lay off employees, cut costs, or absorb, merge, or conglomerate the company into their existing operations, and the company soon disappears, and it is like it never existed. ‘Financial’ buyers focus on time-framed returns and short term investment horizons. They also typically lay off employees, cut costs, do a few quick fixes, over-leverage the company, and exit the company to hit their IRR target. This puts the company into an endless cycle of acquisition and disposition to financial buyers in order to achieve IRRs. This puts a lot of pressure on the employees, the company, and often the quality of the product or service that the company offers. Both types of buyers use other people’s money, so they don’t have the same sense of stewardship. They are the faceless organizations that conglomerate investors and companies. Companies disappear into the Borg. To be a different type of buyer is why Founders Trust exists. Mr. Williamson explains, “We are for sellers that care about their legacy, employees, clients, brand name, history, vendors, and local community. All of these are preserved. We are for sellers that care about the continuation of their company and its culture, and the company achieving its potential. We are for sellers that care about their employees and want to see them succeed, and see them given part of the equity, and incentivized. They want to see their employees do well, too, because they helped the business owner to reach where he is today. With Founders Trust shared ownership, the employees do very well.” Mr. Williamson also explains, “The companies grow, and become stronger and stronger. It is a permanent home for the company. We are not returns driven, we are quality of company driven: if it is a good quality company, then over time, long term value will be created. We don’t need our money back within a certain time frame.” Each exiting founder has different needs, goals, and timeframes. For retiring business owners, their need is often to have a short transition period due to certain circumstances that do not allow them to spend time in the business anymore. In cases like this, Founders Trust works with the ownership to design a successful transition period around their schedule. Wherever possible, existing employees at the company are trained and prepared to step up and create a new leadership team. Founders Trust has developed processes in how to prepare these individuals to replace the owner-manager. It is a difficult process and one which has been refined extensively over the decades. In some cases, Founders Trust will bring in talent from outside of the company, but it is preferred that it comes from within. This gives the opportunity to existing employees and executives to take on roles with more advanced responsibilities. All of the activities during the transition period are overseen by Founders Trust, including the strategy and creating budget limits with the leadership team. It is there to help in any way possible. Founders
RkJQdWJsaXNoZXIy MTUyMDQwMA==