Selling my business

JCarterVA said:   Thank you all for your advice, and input. Right now I am trying to digest it all and here is where I stand so far:

I'll be sending emails/making calls tomorrow to the following:
- JPMorgan Private Bank
- Fidelity Personalized Portfolio
- UBS Private Wealth Management
- Morgan Stanley Private Wealth Management
- Credit Suisse Private Banking
- http://tinyurl.com/7jzjjwo made for an interesting read (PDF)
- Merrill Lynch Private Banking & Investment Group
- ML apparently does retain *some* independence from BoA.
- Vanguard Flagship
- Schwab Private Client
- Bank New York Mellon Individual Wealth Management
- Northern Trust Wealth Management
- Deutsche Bank Private Wealth Management
- US Bank Private Client Reserve

I would appreciate comments/experiences/notions regarding any of the above.

I am focused right now on trying to finish this deal up, and placing my money into an account somewhere for probably 30 days or so to allow me to have meetings with the above firms.

Secondly, I hate to fly due to TSA molestation procedures. I don't anticipate paying large amounts of cash to utilize a private jet just to be molested and fly in comfort. First class does exist for that.

Third, I am researching Texas, Oregon, Wyoming and Delaware which are all states which do not have any sort of income tax. Someone also pointed out that there is a town for sale (yes an actual town) in Wyoming that I could have to myself, thanks for that.

I'll keep you all updated as things progress.

If your the type that doesn't like email spam your might want to mention that you request that they not include you on their marketing Drips in your email. Just tell them to get back to you with what your after and that's it.

dshibb said:   If your the type that doesn't like email spam your might want to mention that you request that they not include you on their marketing Drips in your email. Just tell them to get back to you with what your after and that's it.

I'll be sure to make that particular item is mentioned explicitly and multiple times.

JCarterVA said:   Thank you all for your advice, and input. Right now I am trying to digest it all and here is where I stand so far:

I'll be sending emails/making calls tomorrow to the following:
- JPMorgan Private Bank
- Fidelity Personalized Portfolio
- UBS Private Wealth Management
- Morgan Stanley Private Wealth Management
- Credit Suisse Private Banking
- http://tinyurl.com/7jzjjwo made for an interesting read (PDF)
- Merrill Lynch Private Banking & Investment Group
- ML apparently does retain *some* independence from BoA.
- Vanguard Flagship
- Schwab Private Client
- Bank New York Mellon Individual Wealth Management
- Northern Trust Wealth Management
- Deutsche Bank Private Wealth Management
- US Bank Private Client Reserve

I would appreciate comments/experiences/notions regarding any of the above.

I am focused right now on trying to finish this deal up, and placing my money into an account somewhere for probably 30 days or so to allow me to have meetings with the above firms.

Secondly, I hate to fly due to TSA molestation procedures. I don't anticipate paying large amounts of cash to utilize a private jet just to be molested and fly in comfort. First class does exist for that.

Third, I am researching Texas, Oregon, Wyoming and Delaware which are all states which do not have any sort of income tax. Someone also pointed out that there is a town for sale (yes an actual town) in Wyoming that I could have to myself, thanks for that.

I'll keep you all updated as things progress.

I am going to copy this note and save it for tomorrow, just in case i won a megamillion 290 million jackpot .........
Thanks for showing me the way to richness.

uberbyond said:   first, some background: i work in private equity. your type of business is in our sweet spot.

my best advice to you is to shop the offer. full disclosure: this is partially self-interested (read on...) but regardless I am not BS-ing you. shop the offer, or at least test the market. what if you should be getting $500M?

also, the part about your employee divulging information is EXTREMELY shady. For that alone, I would take anything he/his band of merry men says with a mountain of salt. e.g., without knowing more, I'd say your non-compete is NOT market.

sounds like you run a tech/tech-related company since you go to CES. if you're interested in talking, i'm interested in listening.As someone who went through a couple of these I would say +100.

JCarterVA said:   Hello all,

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.

Have you looked into Invado International?

JCarterVA said:   uutxs said:   You can buy FW back from Ebates!

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

Well, you should consider just buying a FW Moderator. You would have to
be very careful: owning MVP9596 or VBMcGB would certainly be considered work, but
owning WalterMelon, or Logician1313 would probably be pure pleasure.

Goldline is one of the worst places to buy bullion.

Tulving for the win.

If you have an unsolicited offer for near half-a-billion dollars (taking into account "friends'" equity)... don't you think that if properly marketed, you could obtain a highly superior offer given current interest?

kenmoreland said:   JCarterVA said:   uutxs said:   You can buy FW back from Ebates!

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

Well, you should consider just buying a FW Moderator. You would have to
be very careful: owning MVP9596 or VBMcGB would certainly be considered work, but
owning WalterMelon, or Logician1313 would probably be pure pleasure.

Do they bite? Do they need to be walked, fed and exercised? If so, count me out.

Crazytree said:   If you have an unsolicited offer for near half-a-billion dollars (taking into account "friends'" equity)... don't you think that if properly marketed, you could obtain a highly superior offer given current interest?

Read up, we did have it shopped around and based on our valuation (which was completed BEFORE our offer) we received a fair offer.

BitemeIamtoxic said:   Move to Beverly!

Hills that is?

No. In all seriousness...NO! The LA area is for those who like to die before they are 40, sitting in traffic.

JCarterVA said:   v023985 said:   I have a hard time believing that you have a business valued at $225 million, that is attracting interest from a publicly traded PE shop, and that you have no existing relationship with any type of investment bank. What kind of revenues do you have? Is $225mm your cut, or the actual offer?

If $225 is the business valuation, many of the bulge (JPM, GS, Citi, BofA, etc) firms are unlikely to take you on as a client, as you a bit small. However, given the markets, they may, hard to say. You should seek out a boutique firm to advise you. There are many good ones, many of which tend to be regional. Some of the larger "boutiques" are places like Lazzard, Greenhill, Raymond James and then regionals or others.

Anyways, any of these firms should help you with a sell-side process. They will probably take a 3-5% cut, but could also potentially improve the purchase price you may get. Many companies will hold a bake-off and have invited firms come in to pitch how they would sell your business and what type of valuation they would get.

What industry is your business in?

$225 Million is my share of the sale. I can't discuss revenues, or product. We're into the technology sector, after the purchase has been announced and made public I will be happy to post the url to the press release, but right now I want to maintain privacy for as long as plausible.

Priceline back over $700 per share...check
Dot.Com IPO's galore....check
World suppose to end in less than a year....check
Someone making $225Mil overnight based on "tech" without understanding/establishing banking relationships....check

Party like its muthafreaking 1999!

JCarterVA said:   
You wouldn't be buying the house on the other side of SVR would you? I may consider that, if I can track down my old college freshman year, 1st semester roommate.

Actually I think SVR might be renting his house out. I hear it has some hotties next door. I can be the caretaker and alert you to when the parties are happening so you can come down to FL

SUCKISSTAPLES said:   JCarterVA said:   
You wouldn't be buying the house on the other side of SVR would you? I may consider that, if I can track down my old college freshman year, 1st semester roommate.

Actually I think SVR might be renting his house out. I hear it has some hotties next door. I can be the caretaker and alert you to when the parties are happening so you can come down to FL

I heard the same rumor, sounds like a plan! SVR where do I get a rental app?

Actually, you have an interesting problem. It's the same problem that lottery winners have.

Suggestions: go with Northern Trust or a firm of that stature. They're smaller, and have integrity...unlike the muppet kingdom and friends.

Some tips when dealing with investments of your scale:

Don't invest in anything you don't understand.

If a deal has no downside, they're lying to you.

There's always time to say no.

No deal is so good that you can't pass it up.

FDIC only covers 250k/account, so you'd need 900 accounts to cover your $225m.

Don't forget to enjoy your life! I'd love to have problems like yours.

mannyv said:   FDIC only covers 250k/account, so you'd need 900 accounts to cover your $225m.

Don't forget to enjoy your life! I'd love to have problems like yours.
That's what cdars is for

http://www.cdars.com/default.aspx

SUCKISSTAPLES said:   dshibb said:   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.
Td ameritrade is the only one whose account agreement states they won't hold customer funds at risk of rehypothecation loss

All of them can't rehypothecate if you don't get a margin account with them.

SUCKISSTAPLES said:   But tda is the only account agreement to specifically state the customer won't suffer a loss

I really wonder how much that agreement is worth though. If lets say a major broker rehypothecated and lost money on the bets there is no way any regulator would allow a loss in the segregated accounts, but also let the companies general assets stay in tact. If that happened they would make sure that the company transfers its money to the segregated accounts to cover the customer shortfall. Now if TD rehypothecated and lost enough money to wipe out its general assets and there wasn't enough to make all customer accounts 100% whole(like with MF Global) that agreement they drafted then seems pretty worthless to me.

JCarterVA said:   Spac3d said:   Is this Pintrest?

Congrats on your success - the modesty will serve you very well with the new found wealth. What are the other partner(s) doing with their shares?

1.) I work with the public PE shops - they are the 900 lb gorilla who will not bend for a deal, or change a term sheet, but you're cashing out, so don't worry about it
2.) Interview the major asset managers to see who you're comfortable with. The large banks can offer extreme diversification that smaller managers may not have access too. I'd break the money up between 3-5 of them ... and if you enjoy the service of one better, double up the investment.
3.) Others have recommended a family office - but without someone you trust with your life, this sounds like a dangerous decision
4.) Do not underestimate the power of diversification in a large portfolio of money. You will need proper exposure to different asset classes to maximize your nest egg and to limit potential losses. Putting a significant amount in any asset is a poor idea.
5.) If advisers cannot easily explain how they would invest your money - avoid them.

I'm looking forward to an update of this thread.

(1) Exactly.
(2) I'll keep that in mind.
(3) What is a family office exactly? Don't really understand it from what I can Google.
(4) Understood.
(5) I plan on it.

I'll keep it updated as time progresses.Think of a family office as someone who creates their own "private wealth management company" just for their own family. It is popular in NYC and other cities with generational wealth. A family may create a family office for 2 reasons,
1.) They have too much money to park with 100 different managers (see below.
2.) They may have a target strategy that they believe other wealth managers cannot fulfill - for example, owning NYC real estate for 50+ years at a time. Usually it is specialized or they feel that others cannot keep their attention.

I've worked with some prominent family offices, but one you may relate too is MSD Capital - Michael and Susan Dell's family office. They have done some creative deals, and have very bright people, but is amazing how many people work there. For scale, they have about $8.0B they invest on behalf of the Dells.

Crazytree said:   If you have an unsolicited offer for near half-a-billion dollars (taking into account "friends'" equity)... don't you think that if properly marketed, you could obtain a highly superior offer given current interest?No. That's the thinking that periodically leads to Friendster-like performance.