Companies and their owners often face the issue of selling a company during their existence. There are, of course, several reasons for selling, from personal reasons on the part of the owners because they either have no succession, lack of business challenge or health problems, to business reasons where the company’s existence is threatened or different interests of partners or co-owners are shown.
The issue of succession arises mainly in the business of family companies, where it involves the transfer of ownership and management to the next generation. It is a process that is much more complex than just replacing a director, as it involves a range of ownership, legal, financial, and very important emotional factors. The founder is often emotionally attached to the company and does not prepare a plan for the transfer of the company with thoughts of retirement, as he delays this act. In the case of preparing a transfer plan, he may faces a lack of knowledge and experience. Recently, there is less and less transfer of companies to successors, so the owners opt for external professional managers (while maintaining ownership), the sale of part or the entire company, or its closure.
Another important reason for selling a company is certainly the poor financial situation of the company, which in the worst case scenario can lead to the insolvency of the business and the liquidation of the company. Insolvency means a long-term insolvency of a company, where the debtor’s liabilities exceed the company’s assets. Inadequate structure of financial resources requires financial restructuring, which is mostly followed by business restructuring of the company.
The process of financial and business restructuring of a company can be entrusted by companies to external professional managers, such as private equity funds (Privat Equity Funds), which are mostly closed-end funds and invest investors’ funds in such investments. Investors include mainly insurance companies, pension funds, investment banks and well-educated individuals. These funds flourished during the last financial crisis, where investors were looking for investments to hedge against stock market crashes.
In the case of venture capital funds, the basic concept is equity financing, where due to higher risk and low liquidity, the expected return is significantly higher. The venture capital investor is thus willing to accept high risk, and the equity financing stems from the fact that the investor becomes a co-owner of the company. In addition to money, the investor also invests his experience, knowledge and social capital in the company, thus actively engaging in business, especially at the strategic level.
At Superos Fund Management Ltd., we manage the Superos Private Credit Fund, which represents a hybrid system between e.g. Equity and Debt funds with the aim of helping the company to obtain sustainable capital resources (without interfering with the ownership structure) and at the same time provide an appropriate team of managers who will help the company improve its operations. Our concept of cooperation is designed according to the individual needs of the owner and the company and can be aimed at improving business, preparing for sales, establishing a management team or a combination of all three.