Selling my business

SUCKISSTAPLES said:   It's "woe is me"

Woooo is me is Bubb Rubb

Tha whistles go woooo!!!!!!
Bubb Rubb and Lil Sis - olde but goodie

I dropped the "lil", Now I just go by Sis....

JCarterVA said:   Daily update

I've spent most of today meeting with a team from BNY Mellon, who were quite informative and honest about what they could and could not do. They also made several recommendations and of course pitched their offering.

Thanks for the trust information, that is something that will need to be drafted this week by an estate attorney who specializes in Delaware trusts (This seems to be the general consensus all around). I've got a number of options to consider there and will weigh out the pros-cons with a tax attorney and estate attorney.

I'm still going to be meeting with a number of other advisors before I make a decision on any of this, and will not be making any direct investment decisions for a few months. I plan to relax for a bit and try to soak this all in, while letting the funds sit in something such as a high yield savings/money market or 6 Mo CD. (Assortment of, not just one).

Thanks all for the continued advice and input all around. Hopefully since this is in a public venue, it will be useful to someone else in the future.

On a final (and side) note, is anyone else having connectivity issues with tor and this site? It could be VZW LTE service, but I have had shoddy crappy connections all day.

Regards,
JCarterVA

This message has been approved by JCarterVA and The JCarterVA for Ruler of the World Super Ms. Pac

Has anyone mentioned putting in a management closing/retention bonus plan with you getting the lion's share (or not)?

What about other key members of the company? It's always nice to pay out the cash balance to the entire company as a closing bonus, with obviously it being top heavy towards the management team.

I'm surprised the acquirer would not put a retention bonus program for the rest of the company, assuming your company issued stock options and some employees would get a windfall. You may be the one that needs to push that.

I am becoming very bored with this thread, please hurry up and develop an expensive drug habit and blow your money on cars and houses. Thanks.

Although I have very little to add in the way of financial advise, I do appreciate the updates from the OP.
I see many threads where the op posts the original thread and then walks away without participating any further.
I hope you do well with the advise from whoever you choose as your wealth management team.

OP are you Venmo?? That'd explain the 5 phones.

Here's what everybody is forgetting. He hasn't received the 225 million yet. The first thing you can do is buy treasuries until you are sure of how to invest the 225M. Then take your time to learn. Meanwhile, you have 3 yrs of free time. Travel around the world, go to emerging cuntries and enjoy your time.

tsgllca, in the case of the house don't you have to then rent the house from the trust at market rates(arms length) once its placed into an irrevocable?

didn't read everything.. just very boring [another look at me I got money thread]. good luck to OP, post press release when you're done.

dshibb said:   Are people really that impatient? JCarter has already said that once the deal is done and finalized he'll be more willing to get into details. A week ago none of you even knew that a FWF member was selling his company, and now you can't wait 1 month to find out which one. Also like it changes anything anyway for you to find out now.

Stop asking him if he's this company or that company. Wait until the deal is done. Hell he could have just as easily said, "I'm never going to tell you." Be content with the fact that he'll mention it later and the information he has already given you and leave it at that.

I'm not impatient nor do I expect the OP to confirm/deny. I just want to be in the thread with my guess if it closes, and this is real, and I'm right so I can say "haha I guessed it!"

Continuing my campaign for a sports team... You can get a 10% ownership in the Dodgers. Hahaha. All kidding aside, congrats on your success and hope you find the right firm.

OP, without identifying your company...approximately how much has it been netting in the last few years? I'm just curious how a company which doesn't generate enough to give you a few million in liquidity, is suddenly worth $225 million. Have you just been putting millions and millions back into the company to fund expansion?

Edited - I just noticed your post about not disclosing details, a couple of posts above this one.

But really - I just mean a general range...for instance, "last year our net profit before taxes was under a million"; or "between 1 and 10 million"; or "over 20 million" etc. Or just PM me. Although I haven't followed the thread (I just noticed it now), and have only read through the first page, I'm not doubting you - I'm really just curious what your company generates relative to the $225 million purchase price, or if the buyer is just using a revenue multiplier regardless of historic profit margins because they plan to completely replace your cost structure, or to see if perhaps you just got really lucky and your company happens to fill some niche or gap the buyer needs to fill.

If this is giving away too much confidential/identifying info. then I apologize.

LostConsumer said:   OP, without identifying your company...approximately how much has it been netting in the last few years? I'm just curious how a company which doesn't generate enough to give you a few million in liquidity, is suddenly worth $225 million. Have you just been putting millions and millions back into the company to fund expansion?

Edited - I just noticed your post about not disclosing details, a couple of posts about this one.

But really - I just mean a general range...for instance, "last year our net profit before taxes was under a million"; or "between 1 and 10 million"; or "over 20 million" etc. Or just PM me. Although I haven't followed the thread (I just noticed it now), and have only read through the first page, I'm not doubting you - I'm really just curious what your company generates relative to the $225 million purchase price, or if the buyer is just using a revenue multiplier regardless of historic profit margins because they plan to completely replace your cost structure, or to see if perhaps you just got really lucky and your company happens to fill some niche or gap the buyer needs to fill.

If this is giving away too much confidential/identifying info. then I apologize.

Generally, and I say generally because I am not going to disclose anything which is even close to revealing the company, I will explain how this works.

Essentially you start a company, we will call it Fatter Wallets LLC and FW LLC is not making any money at all, so you have a choice: (A) Bootstrap it with your own funds or (B) Bring in angel investors/venture capital.

Fatter Wallets LLC chooses to conduct an "A" round and obtains $14 Million in VC based on a valuation of 140 Million, giving Ohaidere Financial 10% ownership of the company. They appoint a few board members, give you some advice and give you access to resources/contacts they have.

You're still bleeding money as you don't have a user base/ad revenue/whatever and you are paying employees to work there, so you NEED the $14 Million to pay for servers/services/chinese food for the late night hack fests/stress balls/t-shirts because you haven't had time to wash your clothes in the past week.

Now lets say 6 months down the road, you start picking up some ad revenue and your expenses are $10 million yearly, you have ad revenue of $8.5 million, you still NEED the $1.5 million to pay bills. That comes from the $14 MM in VC.

18 months down the road, you want to expand. You really want to move the office away from the massage parlor which hides asian happy ending therapists under the building in the basement and maybe add on some benefits for employees but you're still not breaking even. You launch a Series "B" round of funding and get $30 million on a $300 million valuation even though you have not "realized" $300 million yet. That means you now have 80% of the firm left in founder control as the original 10% plus this 10% is now gone.

You have an exit plan hoping Google/Amazon/Twitter/Facebook/Yahoo/Microsoft or whoever buys you OR you plan to IPO (File an S-1 and go public), that percentage is what you own and will cash out on. If you IPO it then you no longer need to funnel your own money/that of a VC firm into it. You have the public giving you money based on what they are willing to pay to own you. (Don't tell me some of these companies are not over-valued on the market, I can assure you they are.)

However if you sell out, you have a new valuation done and you get rid of it, making it the financial problem of someone else. But at the same time, you no longer are able to increase your wealth along with the valuation as it would if you were public or had just kept going the VC route.

You sell to MSFT for example, they value you at $320 Million even though Mr Gekko at Bank of Wall Street has had his firm value you at $345 Million. You have to kick back and forth and decide that while you may not be bringing in revenue of $345 Million a year you certainly have the growth potential to do so down the road and if they want you bad enough they are going to be forced to negotiate.

Now I am not a CPA, financial type of any capacity, I only speak from hard learned experiences.

As far as what we net/gross yearly, you'll have to pick through financials yourself to figure that out. Not a chance of me disclosing that.

http://www.forbes.com/forbes/2012/0409/investing-yelp-ira-roth-l...

Happy Reading. Tax Dodge.

HumDoHamaraDo said:   http://www.forbes.com/forbes/2012/0409/investing-yelp-ira-roth-l...

Happy Reading. Tax Dodge.

Already considering it for a safe retirement nest egg, but I really do not want to wait until Age 59 1/2 to be able to access the money without penalty.

Thanks for the link though.

mjohnson said:   JCarterVA said:   HumDoHamaraDo said:   http://www.forbes.com/forbes/2012/0409/investing-yelp-ira-roth-l...

Happy Reading. Tax Dodge.

Already considering it for a safe retirement nest egg, but I really do not want to wait until Age 59 1/2 to be able to access the money without penalty.

Thanks for the link though.

It's primarily used as a transfer of wealth vehicle instead of actually being used for your retirement. When/if you eventually have children and want to pass on some of that wealth to them, the estate and transfer taxes can get a little crazy.

From what I have been told the best way to do that, and still be able to make money in the mean time is to set aside a portion and place it in a GRAT (grantor retained annuity trust).

Daily update / Large update.

Okay, bare with me this one is going to be a bit longer than normal.

To those I am emailing back and forth, I am sorry for the lack of replies, I have just been swamped with things here. I will get to them tomorrow, I promise.

** I had a rather long drawn out meeting with counsel yesterday which resulted in a good number of PDF files being generated which could probably be labeled "Investment banking & securities law for those in a complete and utter vegatative state" it was not only easy to understand, but explained everything. After the deal closes I will load them up on my personal site so anyone who wants them can read through them, I have already asked counsel about this and they don't seem to care.

** I met up with a midsized accounting firm recommended to me by PriceWaterhouse Coopers, this firm has handled accounting for several silicon valley/alley types in the past and have offices spread around the country, yet are not quite the size of PWC.

** I will be purchasing a condo in Palm Beach County, Florida (Offer went out this morning) for residency purposes. After this is done, I will need to obtain a photo ID within Florida and title/tag my car there. I know others had recommended other locales, but I have ties to Palm Beach and if I am going to be forced to own property somewhere I want to atleast like the area. The closing should happen within 2-3 days if they accept my offer, as it is an unoccupied unit.

** I WILL have to pay taxes in my current state for income earned up til I establish residency elsewhere. So while the $225 MM is exempt, any salary earned up til residency is not. I should have done this a while ago.

** I have had video calls, and meetings today with a few more banks/custodians.
**** Merrill Lynch is out. The group I was speaking with is licensed in my state, but not the two other states (Including Florida) I expect to frequent the most upon completition of the sale. The investment products didn't sound all that appealing either.
**** Morgan Stanley really dropped the ball. They left me waiting at a restaurant for lunch and claim the whole team which was meeting me just "forgot" to put it into their calendars. I truly hope heads get rolled there, time = money and I lack in time.
**** JPMorgan did an awesome presentation (and great swag), answered every question and made me feel truly comfortable with the product they offer. I will be selecting them as one of my money managers, I am going to work with at least four different ones.
**** Vanguard sent me a flurry of emailed information, I have yet to review.
**** Fidelity set me up with an independent RIA who they recommend, I met with them this afternoon, and they seemed very well put together.
**** I will NOT be establishing a family office, I have no need for it. I will retain a lifestyle management service to provide some of the benefits they offer, while doing others myself.
**** I am still waiting on UBS.
**** US Bank has sent me a FedEx of lots of paper (Buy a scanner guys), I have yet to review.
**** Northern Trust was very nice to speak with, I am awaiting further answers to questions and will get back to them.
**** Waiting on UBS to get back to me.

** I have looked into the personal security aspect, and consulted with some friends. I will be hiring a firm for an initial 6 months, and will conduct a threat assessment at that time to determine if I need it further. I also have an appointment with my home security firm to come make a few upgrades at my current home, and have alerted the security firm which is contracted by the COA to my situation.

** I spoke (for the second time) to a senior level executive at American Express who is giving me advice and is a client of one of the banks I am looking into. He has been beyond helpful and given glowing reviews of the wealth management team I would be working with (he also utilizes).

** I have activated a new line with my cellular provider, under a seperate account number and name (They apparently have a VIP type line for customers who are athletes, large company CEO types) making it harder to look me up. I will have the new line under this provider be my primary, and will utilize a different Google Voice account for it. Making it easier for bankers, and trusted family to reach me.

** Update on the status of the deal. Right now we are told it should be final and ready to prepare press releases next week for an announcement the following week. I will post the release upon announcement by the firm.

** I had counsel prepare documents concerning asset ownership, a non-disclosure agreement, pre-nup and a child support agreement. The last (2) are just in-case.

** I have had unsolicited contact with US Trust, Citi, Wells Fargo and a regional bank (note worthy in this area).
**** I told US Trust I would listen to them after they divested themselves from BoA.
**** I told Citi GFTO.
**** I told Wells Fargo to call me back in 3 weeks. (About the time I move money out of WF.) I'll tell them in 3 weeks I spent it all on hookers and blow for blok and SIS.

** I received an invite to a local paper for a "tour" and "meeting". I've told them I was sick and wouldn't be available for a while.

I'll provide more updates as things tend to occur. Thank you all for your advice and continued support!

wonder if april fools is around the corner

Kat009 said:   JCarterVA said:   HumDoHamaraDo said:   http://www.forbes.com/forbes/2012/0409/investing-yelp-ira-roth-l...

Happy Reading. Tax Dodge.

Already considering it for a safe retirement nest egg, but I really do not want to wait until Age 59 1/2 to be able to access the money without penalty.

Thanks for the link though.

You can take contributions, but not gains, out of a Roth IRA whenever you want. No need to wait until 59.5. Investing 101.

ETA: That Forbes article was very, very interesting. Thanks for posting.

Right, with a 10% penalty and taxes from a non-qualified deduction. Which is what I said....