There comes a time for many founders when they are ready to pass the baton of running their business to someone else. It’s a rare founder who wants to go from zero to running and scaling a large, long-term company. When that time comes — you may have expectations on what you would like to exit for, or have read stories about other company valuations — I thought it might be useful to share some of the other side’s viewpoint. So, here are some of the criteria we use at Scaleworks when evaluating a new opportunity.
Rule 1: Don’t lose money
The cliche is “rule number two: read rule number one.” Make sure any acquisition you consider is at a fair price and that you have identified some low-hanging fruit opportunities for improvement that you are confident in your ability to execute on.
What does a fair price mean?
For us, it means a price we have confidence we can either pay back over time from cash flow, or sell the business on a profit multiple for at least the same price we bought it for.
You may have expectations on what you would like to exit for, or have read stories about other valuations — but I thought it might be useful to share some of the other side's viewpoint. by: Walter Thompson via https://www.AiUpNow.com/
