April 2014
In This Issue
Key Considerations
Laying Down the Law
5 more things every owner should know

 

12 Value Drivers for Technology Companies

 

Register Now button from GoToWebinar

 

Are you building your technology company for the long haul -- or do you plan to sell it in the next few years? Either way, if you are only concerned with growing revenues, you may not be maximizing the value of your company. Value drivers are the factors that provide a competitive advantage, and ultimately make a business more valuable and attractive.

Most companies are valued based on their cash flow, but buyers won't pay top dollar if there are significant risks associated with cash flow. That's why prudent owners should understand their value drivers and make an effort to control their company's risk factors.

In this presentation we will discuss the 12 factors that drive the value of tech companies from the buyer/investor perspective. Once you understand your value drivers you can rate your own company, understand its strengths and weaknesses, and focus on areas that need the most attention. This can give you a valuable strategic and tactical tool in running your business and optimizing its value. 

 

Date:   April 9, 2014 

Time: 11 AM Central / 12 PM Eastern  

 

Click below to register, seating is limited:

  

Register Now button from GoToWebinar
 
 
Key Considerations
  
The following questions will help a seller better understand his or her business and thereby value the company more prudently.
  • What's for sale? What's not for sale? Does the sale include real estate? Is some of the equipment leased instead of owned?
  • What assets are not earning money?  Perhaps they should be sold off.
  • What is proprietary? Consider copyrights, patents, software, techniques, etc.
  • What is your competitive advantage?  Is it a certain niche, superior marketing, or more efficient operations?
  • What is the barrier of entry: capital, technical expertise, tight relationships?
  • Are there employment agreements or non-competes? Have you failed to secure these agreements from key employees?
  • How would someone grow the business? What would it take?
  • How much working capital would someone need to run the business?
  • What is the depth of management and how dependent is the business on you, the owner/manager?
  • How is the financial reporting undertaken and recorded, and how do you, or management, adjust the business accordingly?
  

Welcome to our April newsletter. This month we have articles about non-compete agreements and other key considerations in selling your company. We also have a link to our latest blog. 

 

If you own or manage a technology business, check out our April 9th webinar "12 Value Drivers for Tech Companies". You can register and see a list of upcoming events here .

 

Austin Dale Group is a technology M&A advisory firm for software, IT service, and cloud computing companies. We welcome your inquiries and your referrals are the greatest compliments that we can receive.

rjd and jwa signatures 
John Austin & Bob Dale
512-327-0427
 
Laying Down the Law
  
There are four basic types of non-compete agreements restricting employees' use of company information:
  1. Non-competition agreement.  This agreement prohibits an employee from working for the competitor of the employer or from competing with the employer once the employee
    leaves the company.  Such an agreement is common among employees with access to sensitive company information.
  2. Non-solicitation agreement.  This agreement prevents former employees from soliciting, contracting, or transacting business with the employer's existing customers or employees.  It is aimed at stopping employees from walking off with client lists or employees.
  3. Non-disclosure agreement.  This agreement prevents employees from using their former employer's trade secrets, proprietary information, or confidential business information, or disclosing trade secrets to competitors.
  4. Confidentiality agreement.  This informs employees that the employer intends to keep certain information confidential.
The one that seems to be of the most concern - and source of problems - is the first one. The other three make sense and generally are not an issue in the employee/employer relationship. With the non-compete agreement, however, consider an employee who has a job requiring skills specific to his industry and who is unhappy with his relationship with a current employer.  The non-compete essentially prevents him from leaving the employ of this company and being able to utilize his specific skills. In other words, the employee, in this situation, is a captive of the current employer. It should be noted that many states do not enforce non-competition agreements.


Five more things every owner should know 
  1. Get paid quickly - A sale isn't real until you have the money. We see a lot of companies that are profitable but cash poor....[click here to read entire blog]
Austin Dale Group



Like us on Facebook    Follow us on Twitter    View our profile on LinkedIn
Member of Alliance for Channel Success