North America Business Awards 2022 | 8 James was a successful founder. Little did he know that one day, after he sold his company, it would have its employees laid off, its clients mistreated, he’d lose respect in his community, and his business would be conglomerated into the Borg. Is this a horror movie? No, it is the reality of the buyer landscape as it exists for most sellers of businesses. Founders and owners need a better type of buyer. This is the reason that Founders Trust exists, to be a different buyer , with a different strategy. What does the buyer landscape mean for the future of U.S. businesses, and what does that mean for owners looking to achieve an exit? We speak with Founders Trust CEO, Matt Williamson, to find out more. Founders Trust works with founders and owners of small and mediumsized privately owned companies, whose owners want to retire or redesign their role in their business. Of course, owner circumstances and motivations are rarely the same, so Founders Trust talks with founders to understand what they want to do. Some owners want to retire, and some want a longer transition period. Other times, owners want to be able to continue doing the work that they love, without the heavy stress and administration that comes with ownership. They want to go back to doing what they used to love in their business, in either a leadership position or board or advisory role. Previous owners of companies often want to stay with the company in the form of a board member or advisor, and they keep their desks at the company, contributing as and when they want to, not in an obligatory manner. Williamson explains, “If the business meets our criteria, we talk with the seller to come up with a transition and possibly a role that fits with what he really wants to do.” Founders Trust only works with businesses that meet its very specific criteria. Generally, they must have successful management in place, and a strong operating track record. In short, profitable companies that have some successful history behind them. Founders Trust is an admirer of founders. Essentially the pioneers of the business world, founders often start out with nothing, or very little. They may not fully understand the business they’re getting themselves into. And they certainly don’t have the connections they need to make the venture a success. At least not at the start. But, over time, with a lot of perseverance and personal sacrifice, they build something special. They provide employment and security for staff, and quality products or services to their clients. And, when they’ve worked for years to grow a business, having an exit strategy is essential. Matt Williamson, CEO of Founders Trust says, “We have so much respect for people that have built successful businesses from nothing. We’re here to help them have the exit and final success they deserve. We want them to see their work and what they believe in continue, for them and for their employees. We want to help as many founders as we can to have the exit they deserve without having to compromise their criteria and standards for the buyer. This is our reason for being.” Founders Trust has a strategy opposite to the typical buyers in the marketplace. In the U.S. landscape, buyers belong to two categories: ‘strategic’ and the ‘financial’ buyers. ‘Strategic’ buyers will typically do layoffs, cut costs, and merge, absorb, or conglomerate the company into existing operations. The company disappears, like it never existed. ‘Financial’ buyers focus on short term investment horizons and timeframed returns. Financial buyers also typically cut costs, do layoffs, do a few quick fixes, overleverage the company, and exit the company in a few years to hit their IRR target. The company enters into an endless cycle of acquisition and disposition to other financial buyers in order to achieve target IRRs. This puts pressure on the company, employees, and the quality of the product or service. 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. Founders Trust exists to be a different type of buyer. 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. Culture is what you do: it is the long-built and really fire-tested set of values and knowledge a company has. This has value for clients, for the community and nation, and for employees.” Williamson explains, “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.” Williamson 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.” Owners of small to medium businesses often play a big part in the management structure. In cases where the managers who remain may not have all the skills required to take over, Founders Trust typically builds in a period of transition. Williamson explains, “During this time, the existing middle management of the company undertakes training. They prepare to step up and create a leadership team. We’ve refined our processes tremendously over the decades. It’s very practical. We’ll Oct22616 Best SME-Focused Acquisition Firm - USA
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