Selling my business

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Hello all,

I am a present FW user, under a different screen name and due to privacy concerns I want to ask for your advice under this different name.

A week ago, I was approached by an employee who informed me that his father's investment group wanted to buy out my business. He handed me a Letter of Intent, and business cards for the various lawyers/advisors representing the investment group.

I read things over and decided to call a good friend who works with "BigLaw" rather than the smaller attorney who has represented us in the past for minor disputes and contractual issues. He's helped me (after I hired his firm of course) put together a team of advisors who has advised me to accept the LoI and move forward to due diligance, which thanks to above mentioned employee has moved forward rapidly (They had much of this information already).

This is where I am turning here for advice. My take-away from this is $225 Million, a sum I have never seen before in my life. I over the past 4 years have managed to decrease my student loans to $15,000 remaining, and pay off my car. I have no clue about private bankers, investment advisors (my investments are self directed as of now) or well, much of anything here. I'm fairly happy with my present (community) bank, but they are not equipped to handle any type of investment advice or securities transactions. I quite honestly do not want to manage this myself, but I am leary on how to go about turning it over.

My situation:
- $305,000 in debt (Mortgage, student loans)
- I will be prohibited from working for 3 years, under a non-compete clause, so I will need to live off of the money.
- No prior experience with investments over $200,000 (Approx. value of my Fidelity account which I had planned for retirement.)
- Great fear of someone running off with my money/blowing a hole into the ground and pushing me in it. (ie: bank failure)
- I --DO-- plan to work again, after the 3 years are up, but I am unsure as to what I will get into.

I'm a bit boggled and jostled as this has all come on quite fast and heavy, so apologies in advance if this reads a bit scattered. I appreciate any advice given.

Member Summary
Most Recent Posts
I saw this thread was back on the first page and got all excited.

Fail.

Chargum85 (Sep. 05, 2013 @ 10:30p) |

So in the past 10 posts we've had Trolls, Epics, Fails, Rickrolls, and Bumps. Let's not turn this forum into the same c... (more)

awstick (Sep. 06, 2013 @ 11:39a) |

As Christopher Columbus said, "that ship sailed long ago."   

Mickie3 (Sep. 06, 2013 @ 8:36p) |

Please take the time to read this post. It is an update as to what I have done currently. Secondly, please read the ENTIRE thread.

Current update is at this link.

_________

Save your time reading the thread; OP hasn't been back in a week or so. 70% he's a troll with what appears to be a lot of time on his hands.

Or he just got $225M and is in Vegas w/ H&B
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JCarterVA said:   Hello all,

I am a present FW user, under a different screen name and due to privacy concerns I want to ask for your advice under this different name.

A week ago, I was approached by an employee who informed me that his father's investment group wanted to buy out my business. He handed me a Letter of Intent, and business cards for the various lawyers/advisors representing the investment group.

I read things over and decided to call a good friend who works with "BigLaw" rather than the smaller attorney who has represented us in the past for minor disputes and contractual issues. He's helped me (after I hired his firm of course) put together a team of advisors who has advised me to accept the LoI and move forward to due diligance, which thanks to above mentioned employee has moved forward rapidly (They had much of this information already).

This is where I am turning here for advice. My take-away from this is $225 Million, a sum I have never seen before in my life. I over the past 4 years have managed to decrease my student loans to $15,000 remaining, and pay off my car. I have no clue about private bankers, investment advisors (my investments are self directed as of now) or well, much of anything here. I'm fairly happy with my present (community) bank, but they are not equipped to handle any type of investment advice or securities transactions. I quite honestly do not want to manage this myself, but I am leary on how to go about turning it over.

My situation:
- $305,000 in debt (Mortgage, student loans)
- I will be prohibited from working for 3 years, under a non-compete clause, so I will need to live off of the money.
- No prior experience with investments over $200,000 (Approx. value of my Fidelity account which I had planned for retirement.)
- Great fear of someone running off with my money/blowing a hole into the ground and pushing me in it. (ie: bank failure)
- I --DO-- plan to work again, after the 3 years are up, but I am unsure as to what I will get into.

I'm a bit boggled and jostled as this has all come on quite fast and heavy, so apologies in advance if this reads a bit scattered. I appreciate any advice given.


Quoted for preservation. You're listing a $15k student loan & $305k mortgage, and you're selling your company for $225,000,000?!? So the issue is......

JCarterVA said:   
This is where I am turning here for advice. My take-away from this is $225 Million, a sum I have never seen before in my life.


You are coming to a forum where they spend hours talking about:

1. Which cards waive your bill if the sum is less than dollar.
2. TY Points
3. Credit card arbitrage when the interest rates are around 1%
4. How to get a free credit score

So, you get what you pay for. Are you sure you want to even waste time reading the replies?

My friend the Prince knows all about this stuff. I can introduce you to His Royal Highness.

x

I wish I had your problems

For $225 million I would consider hiring one of the many companies that have advising set up for individuals who come into large sums of money rapidly. If you really want help I would say PM suckisstaples or Crazytree both of whom seem to have a reasonably net worth and are quite intelligent about money and probably have connections to people who manage large net worth individuals.

I wouldn't post about it on fatwallet. We are pretty good at stalking and for these sums of money it is likely this gets reported on somewhere and your true identity can be established.

Also make sure this isn't an elaborate scam... unlikely, but still watch out. I find it hard to believe you get offered $225 million out of the blue without realizing you have a very valuable company (I'm guessing internet startup of some sort).

Edit to mention I strongly suspect this is a troll...

Pay off all of your debt, take maybe 4 years of annual salary (3 to live on and 1 to blow) and put the money somewhere else and do not touch it for 6-12 months. This will give you time to plan and really think about what you might want to do with that money.

Don't tell anyone in your real life unless you have to, or else you'll have more "friends" than you know what to do with.

Honestly, I would seriously think about just buying some AAA corporate/municipal bonds or US Treasuries, and stop there. You just want to put it somewhere safe and yet earning a little bit, no need to take any more risk, especially right now. Maybe in 5 years you will open a charitable foundation, by then you should know more about this sudden wealth and the way to responsibly grow it to leave a legacy.

Congrats!

I knew what the firm was worth, I just had not planned on selling it. I'd prefer not to disclose the company, as that would identify me.

I do understand what FW is for, I use it on a regular basis. Yes I want to see the replies, but I am hoping someone can come along and direct me to a fairly trust worthy firm which isn't at risk for failing.

NukeMedDude said:   Quoted for preservation. You're listing a $15k student loan & $305k mortgage, and you're selling your company for $225,000,000?!? So the issue is......

Actually mortgage + student loan is ~$305k remaining balance.

I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?

LordB said:   For $225 million I would consider hiring one of the many companies that have advising set up for individuals who come into large sums of money rapidly. If you really want help I would say PM suckisstaples or Crazytree both of whom seem to have a reasonably net worth and are quite intelligent about money and probably have connections to people who manage large net worth individuals.

I wouldn't post about it on fatwallet. We are pretty good at stalking and for these sums of money it is likely this gets reported on somewhere and your true identity can be established.

Also make sure this isn't an elaborate scam... unlikely, but still watch out. I find it hard to believe you get offered $225 million out of the blue without realizing you have a very valuable company (I'm guessing internet startup of some sort).

Edit to mention I strongly suspect this is a troll...


I appreciate your concern, but stalking me wont get much. I just do not want my identity disclosed in the due diligance stages, it will be in a press release shortly afterwards.

Unfortunately my house isn't under a bridge, or on an internet forum so I am unlikely a troll.

Step 1: Assume a 60% chunk gone to advisors, taxes, H&B
Step 2: Spend less than a million dollars a year for the rest of your life.
Step 3: Don't live to be 176 years old.

JCarterVA said:   NukeMedDude said:   Quoted for preservation. You're listing a $15k student loan & $305k mortgage, and you're selling your company for $225,000,000?!? So the issue is......

Actually mortgage + student loan is ~$305k remaining balance.


That debt is .1% of your net worth... Your going to have to start thinking in very different terms. You would make 2.25 million a year at 1% interest... that $315k is barely a rounding error. (before tax... but it still is a pretty small % even after you loose all the money from taxes)

corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?

The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.

JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?

The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.


You could put the FDIC-insured maximum into infinite banks at 0% interest and be fine forever. I maintain that this can't be a real issue you are having.

LiquidSapphire said:   Pay off all of your debt, take maybe 4 years of annual salary (3 to live on and 1 to blow) and put the money somewhere else and do not touch it for 6-12 months. This will give you time to plan and really think about what you might want to do with that money.

Don't tell anyone in your real life unless you have to, or else you'll have more "friends" than you know what to do with.

Honestly, I would seriously think about just buying some AAA corporate/municipal bonds or US Treasuries, and stop there. You just want to put it somewhere safe and yet earning a little bit, no need to take any more risk, especially right now. Maybe in 5 years you will open a charitable foundation, by then you should know more about this sudden wealth and the way to responsibly grow it to leave a legacy.

Congrats!


Fortunately most of my "friends" are involved in the company and have a share in the sale. Unfortunately, the purchasing group is a public private equity firm which is insistant on press coverage at the anouncement. So everyone and anyone I have ever met, seen or visually glanced at will presume I owe them something.

I appreciate the other advice though, thanks.

JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.Check their website for a Contact Us form or a list of branches. Engage via one or both.

There is no secret password to the private banking industry.

Spread your money out over a few firms. That should be a given.

You don't need to just look at banks. Any reasonably large custodian will have the money segregated in a separate account away from the custodians personal books.


In securities the law states that client assets can't be commingled with the firm. If the firm goes under its not with your money, but the firms general account. Now MF Global showed everybody that even though a company can't bring your assets into the companies general assets they can rehypothecate your account and if the bets they make with those rehypothecated funds lose out then you could see a loss in your account balance that you didn't make. But you become the firms most senior creditor ensuring your paid before anybody else.

Basically minus the case at MF Global if money is held at a large custodian I can't really think of any example where investors lost money because of decisions at the firm they held money with. Your primary risk is that you invest in ways that lose money. That said with $225 million you don't want to put all your eggs in one basket even if investors have almost never been subjected to the mistakes their custodians have made.

JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?

The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.


Um, you obviously use financial people in your dealings as a company owner. Why not start there first asking for general recommendations? Or you could ask for a referral from the advisors advising you on the sale of your company? You could also call Goldman Sachs, Merrill or Citi.

Disclosure: I'm long BofA stock, Citi stock, and own GS call options!

Are you one of the three envaulted guys?

Presume like you said earlier, after taxes and probably a new car and such I have a hefty windfall. I still want to be able to start-up another firm after my non-compete agreement expires, so I will need some amount of growth over the next 3 years to allow me to reinvest into the new firm. This time, without angel investors.

NukeMedDude said:   JCarterVA said:   Hello all,

I am a present FW user, under a different screen name and due to privacy concerns I want to ask for your advice under this different name.

A week ago, I was approached by an employee who informed me that his father's investment group wanted to buy out my business. He handed me a Letter of Intent, and business cards for the various lawyers/advisors representing the investment group.

I read things over and decided to call a good friend who works with "BigLaw" rather than the smaller attorney who has represented us in the past for minor disputes and contractual issues. He's helped me (after I hired his firm of course) put together a team of advisors who has advised me to accept the LoI and move forward to due diligance, which thanks to above mentioned employee has moved forward rapidly (They had much of this information already).

This is where I am turning here for advice. My take-away from this is $225 Million, a sum I have never seen before in my life. I over the past 4 years have managed to decrease my student loans to $15,000 remaining, and pay off my car. I have no clue about private bankers, investment advisors (my investments are self directed as of now) or well, much of anything here. I'm fairly happy with my present (community) bank, but they are not equipped to handle any type of investment advice or securities transactions. I quite honestly do not want to manage this myself, but I am leary on how to go about turning it over.

My situation:
- $305,000 in debt (Mortgage, student loans)
- I will be prohibited from working for 3 years, under a non-compete clause, so I will need to live off of the money.
- No prior experience with investments over $200,000 (Approx. value of my Fidelity account which I had planned for retirement.)
- Great fear of someone running off with my money/blowing a hole into the ground and pushing me in it. (ie: bank failure)
- I --DO-- plan to work again, after the 3 years are up, but I am unsure as to what I will get into.

I'm a bit boggled and jostled as this has all come on quite fast and heavy, so apologies in advance if this reads a bit scattered. I appreciate any advice given.


Quoted for preservation. You're listing a $15k student loan & $305k mortgage, and you're selling your company for $225,000,000?!? So the issue is......
I think the issue is that he doesnt want to have to come back here in 1-2 years and explain how he lost $225-million and still has $15k student loans. We routinely criticize people for diving in headfirst, then asking questions after its too late to do anything about it - he knows he's going to be in over his head, and is trying to resolve that before it becomes a problem.

ajh5408 said:   JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.Check their website for a Contact Us form or a list of branches. Engage via one or both.

There is no secret password to the private banking industry.


Physically establishing the account isn't hard. It's picking the right firm.

Well just to tell you I personally would do:

15% commodities... oil, silver, gold etc.
15% into high risk startup companies
15% into established large cap companies
15% into foreign etc. companies
15% into ultra safe investments like highly rated bonds, gov't treasuries etc.
1% play money
5% seed financing (basically my hobby would be lending out seed money to startups just because it would be fun for me)
10% charities etc.
1% pay off all debts
5% get immediate family members set for life on a comfortable $100k salary equivalent... probably in the form of a trust or something so they can't blow it all.

Anyways I'm done dreaming now XD the remaining % could be money to buy a place way out of the way and stock it with emergency provisions in case the zombies come to life or similar disasters.

corporateclaw said:   Are you one of the three envaulted guys?

No.

It is very easy to establish a relationship with any bank. All of them have private wealth management arms, and all of them will be begging for your business. Heck, just call/email the general info from their websites. Don't disclose your fortune up front. Someone will contact you. There are a ton of investment/commercial banks to help you. Be private about your fortune - you don't want everyone to know. You can give ranges for the ones you think are likely to be good with your money. Let them all pitch you their business proposal and ultimately pick one (or multiple if you want to split the funds across banks). You have enough wealth to diversify your managers. Learn about the fees, restrictions. They also offer estate planning, etc. Heck, I'll manage a portion of your money!

Here's a small list of potential firms (in no particular order):
Goldman
Morgan Stanley
Deutsche Bank
JP Morgan
UBS
Bank of America
HSBC

PM if you want more details.

JCarterVA said:   ajh5408 said:   JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.Check their website for a Contact Us form or a list of branches. Engage via one or both.

There is no secret password to the private banking industry.
Physically establishing the account isn't hard. It's picking the right firm.
JP Morgan. The first thing you're going to want is a Palladium card.

Not for credit, but for self-defense.

NukeMedDude said:   JCarterVA said:   corporateclaw said:   I'm not sure what the question could even be here? You've built a 225million-dollar company and now you're not sure how to make that 225 million last you for 3 years? This has to be a joke, right?

The question is, how do I go about establishing a financial relationship with a bank with a securities arm (ie: US Trust, JPMorgan) and trust a big bank not to fail, or take advantage of my complete lack of knowledge. I could easily live off the money for the rest of my life, I am just about as trusting as a blind 3 legged dog who has been abused from birth, when it comes to the banking system.


Um, you obviously use financial people in your dealings as a company owner. Why not start there first asking for general recommendations? Or you could ask for a referral from the advisors advising you on the sale of your company? You could also call Goldman Sachs, Merrill or Citi.

Disclosure: I'm long BofA stock, Citi stock, and own GS call options!


Goldman only accepts muppets as clients.

Merrill belongs to BoA.

Citi, well...that is just Citi.

I'm hoping to find a firm which didn't accept any TARP money, or atleast didn't accept it strictly to avoid failure. If they are going to manage my money I want to know they can manage their own.

dshibb said:   Spread your money out over a few firms. That should be a given.

You don't need to just look at banks. Any reasonably large custodian will have the money segregated in a separate account away from the custodians personal books.


In securities the law states that client assets can't be commingled with the firm. If the firm goes under its not with your money, but the firms general account. Now MF Global showed everybody that even though a company can't bring your assets into the companies general assets they can rehypothecate your account and if the bets they make with those rehypothecated funds lose out then you could see a loss in your account balance that you didn't make. But you become the firms most senior creditor ensuring your paid before anybody else.

Basically minus the case at MF Global if money is held at a large custodian I can't really think of any example where investors lost money because of decisions at the firm they held money with. Your primary risk is that you invest in ways that lose money. That said with $225 million you don't want to put all your eggs in one basket even if investors have almost never been subjected to the mistakes their custodians have made.


Thanks. Could you provide a few examples of some of the "large" custodians? I'm presuming discussing this with the PwC team working on the sale would be a good idea?

Whoever you get, spend the most time figuring out how they get paid and keep the fees low. I'd diversify custodians to avoid a Madoff situation.

If I were you though I'd go the full Suze. $1M in the market, the rest in treasuries. No advisors needed.

Glitch99 said:   NukeMedDude said:   Quoted for preservation. You're listing a $15k student loan & $305k mortgage, and you're selling your company for $225,000,000?!? So the issue is......I think the issue is that he doesnt want to have to come back here in 1-2 years and explain how he lost $225-million and still has $15k student loans. We routinely criticize people for diving in headfirst, then asking questions after its too late to do anything about it - he knows he's going to be in over his head, and is trying to resolve that before it becomes a problem.

Exactly. Thank you.

Sesq said:   Whoever you get, spend the most time figuring out how they get paid and keep the fees low. I'd diversify custodians to avoid a Madoff situation.

If I were you though I'd go the full Suze. $1M in the market, the rest in treasuries. No advisors needed.


1/4 in US Treasuries and then 1/4 in each of the three countries you think might be most likely to conquer america in the next 100 years, to make sure you have all your bases covered.

Large custodians = Fidelity, Vangaurd, Schwab, BOA, CITI, CHASE, JP Morgan, Cap ONE, probably a dozen big insurance companies, a few more mutual fund companies, etc.

You can buy FW back from Ebates!

LordB said:   Well just to tell you I personally would do:

15% commodities... oil, silver, gold etc.
15% into high risk startup companies
15% into established large cap companies
15% into foreign etc. companies
15% into ultra safe investments like highly rated bonds, gov't treasuries etc.
1% play money
5% seed financing (basically my hobby would be lending out seed money to startups just because it would be fun for me)
10% charities etc.
1% pay off all debts
5% get immediate family members set for life on a comfortable $100k salary equivalent... probably in the form of a trust or something so they can't blow it all.

Anyways I'm done dreaming now XD the remaining % could be money to buy a place way out of the way and stock it with emergency provisions in case the zombies come to life or similar disasters.


Thanks. I'll be sure to count in the zombie defense force's donation as charity.

JCarterVA said:   dshibb said:   Spread your money out over a few firms. That should be a given.

You don't need to just look at banks. Any reasonably large custodian will have the money segregated in a separate account away from the custodians personal books.


In securities the law states that client assets can't be commingled with the firm. If the firm goes under its not with your money, but the firms general account. Now MF Global showed everybody that even though a company can't bring your assets into the companies general assets they can rehypothecate your account and if the bets they make with those rehypothecated funds lose out then you could see a loss in your account balance that you didn't make. But you become the firms most senior creditor ensuring your paid before anybody else.

Basically minus the case at MF Global if money is held at a large custodian I can't really think of any example where investors lost money because of decisions at the firm they held money with. Your primary risk is that you invest in ways that lose money. That said with $225 million you don't want to put all your eggs in one basket even if investors have almost never been subjected to the mistakes their custodians have made.


Thanks. Could you provide a few examples of some of the "large" custodians? I'm presuming discussing this with the PwC team working on the sale would be a good idea?


Interactive Brokers, TD Ameritrade, Any Broker that uses Pershing, Schwab, Fidelity, Vanguard, etc. they are all both brokerages and they all are custodians of money as well.

Maybe they might have a referral for a money manager at best, but other than that I don't see what else they would bring to the table.

Sesq said:   Large custodians = Fidelity, Vangaurd, Schwab, BOA, CITI, CHASE, JP Morgan, Cap ONE, probably a dozen big insurance companies, a few more mutual fund companies, etc.

Would Fidelity account manage the account, or would it be self directed as my current account is?

uutxs said:   You can buy FW back from Ebates!

Prohibited from working for 3 years, so that would need to wait.

Skipping 1085 Messages...
awstick said:   So in the past 10 posts we've had Trolls, Epics, Fails, Rickrolls, and Bumps. Let's not turn this forum into the same cesspool most online forums are.
  


As Christopher Columbus said, "that ship sailed long ago."   



 

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