Scenarios

Over the last 20 years, the team at Lightning Partners has advised founders, investors and growth companies through a wide range of scenarios.  Some common scenarios where we advise clients are listed below. Each of these scenarios has unique dynamics, a unique set of stakeholders, and a unique set of objectives, which is why we take a highly customized approach. Working collaboratively with our clients, we thoroughly assess their objectives, meticulously evaluate the situation and thoughtfully map out the chessboard of steps needed to create attractive options and, ultimately, drive optimal value that surpasses client expectations.

INBOUND INTEREST IN YOUR COMPANY

  • Inbound offer: You have an offer in hand from an investor or buyer and need help to assess what to do next, including how to optimize the existing offer or generate additional offers. The buyer is likely to demand or already is demanding exclusivity.

  • Unsolicited inbound interest: You have a buyer “at the table” and want to quickly explore other options for the company. Or you may have an interested party “hanging around the hoop” and you wonder how to induce them to make a formal offer. Or you may be getting countless inbound calls from private equity and growth equity investors and you wonder if they are a real option and how you might manage so many conversations in an efficient manner.

  • Dealing with your preferred buyer: Your preferred buyer is doing parallel path diligence on your company as well as your competitor(s), and they could also be threatening to acquire your competitor if you do not agree to a transaction with them. Alternatively, you may already have offers, but your preferred buyer or investor is moving too slow and “needs more time” because of other priorities.

LIQUIDITY

  • Founder liquidity: As a founder, you want to get partial or complete liquidity for all of your hard work building your company. Is now the right time? How do you identify the right partner and get maximum value? Will you have to give up effective control in order to get some liquidity?
     
  • Investor liquidity: It is time to explore options and get a return for investors. How do you do this and not be “for sale?” The timing may not be ideal to run a process, but the investor base needs liquidity.

RAISING CAPITAL

  • Market dynamics: You need to raise capital to take advantage of (or defend against) a rapidly changing environment.
     
  • Growth capital: You want to raise capital to invest in a variety of growth initiatives, such as sales and marketing, expansion into new markets, build out of a new product or even acquisitions.
     
  • Large market: You have a large market that you can attack with more capital.
     
  • Capitalization: Current investors may not be able to fund the company’s next phase of growth.

YOU NEED A PARTNER TO REALIZE YOUR POTENTIAL

  • Strategic partner: You need a strategic partner to help get your product to a broader audience.
     
  • Financial partner: You need a financial partner to help you accelerate growth, help with acquisitions, operations and strategy.
     
  • The right partner: You want to make sure you find the right acquirer for your company, your employees, your customers and your partners. This may require talking to a broader universe of strategic and financial parties.

RECENT MARKET ACTIVITY REQUIRES ACTION

  • Recent market activity has made you think about your options. Some event(s) in the market make you wonder if you should test the waters to raise capital or consider a sale.
     
  • Recent M&A activity in your sector has triggered buyer and investor interest.
     
  • Valuations in your sector are attractive or are quickly changing.
     
  • Your competitive landscape is changing.
     
  • Your competitor just raised capital or was acquired (by Google!).
     
  • You are uncertain of the forward macro environment.
     
  • You don’t want your best acquirer to buy an inferior competitor. 

POSITIONING & MAXIMIZING VALUATION

  • Positioning: You want to be positioned properly and optimize valuation if you sell or raise capital.
     
  • Perception: You want your company to be “bought” not “sold.”
     
  • Synergy credit: You want to get “paid for” (i.e. a valuation increase for) synergy value created by combining with a larger acquirer.
     
  • Forward credit: You want a valuation that gets you forward credit. You have made significant investment in your business but the benefits do not show up yet in your financial statements. You have launched a new product but only just started to cross-sell it to your customer base. You have high forward visibility into your business. Or you are just about to “turn the corner” on your operational scale and profitability.
     
  • Visibility: You want to increase your visibility with potential future buyers. You may not have visibility into who might be a good acquirer and need a strategy to gain that visibility, or your best potential acquirers may not even know who you are (yet). You don’t have time to focus on strategic discussions with future potential acquirers.

OTHER KEY QUESTIONS

  • The Board and investor objectives are not aligned and you wonder how to get them all on the same page in an actionable way.
     
  • You are not sure if now is the time to sell.
     
  • You want to acquire your competitor.
     
  • You have a business unit that is not core to your strategy going forward.