The generational transition is a crucial moment for every entrepreneur. If you don't have a natural successor, or if you have one but he has taken a path outside the family business or is not suitable for the role, finding the right investor becomes essential to ensure the continuity of your company.
Here's a practical guide to identifying the ideal investor and maximizing the value of your company.
1. Why is finding the right investor crucial?
When it comes time to leave the company, many entrepreneurs have a number of needs. In particular, they want to:
- Business continuity: Ensure that the company continues to respect its history and the values built over time.
- Monetization: Make a fair profit for the years of hard work, sacrifices and investment dedicated to the company.
- Safety for employees: Ensure a stable future for the employees who have helped to create and grow the company.
Finding an investor aligned with these objectives is essential for a successful generational transition.
2. The difference between financial and industrial investors
The main division between investors, although there are more and more cases of investors with a hybrid approach, is in two macro-categories: a) financial investor, b) industrial investor.
a) Financial investor: These are private equity funds, family offices or institutional investors.
Key Features:
- Interest in economic performance.
- Medium-long term investment (3-7 years).
- Financial and strategic support to improve the management and value of the company.
Advantages:
- They help to professionalize corporate governance.
- Great for companies with unexpressed growth potential.
b) Industrial investor: It is a company or entrepreneur that operates in the same sector or in a complementary sector.
Key Features:
- Interest in the strategic integration of the company into its business.
- Focus on synergy and portfolio expansion.
Advantages:
- Bring industry-specific expertise.
- It often guarantees greater stability in the long term.
Which one to choose?
There is no single answer to this question.
To summarize, you could say that if your goal is to maximize economic value, you might prefer a financial investor. If, on the other hand, you want a smooth transition with a focus on business continuity, an industrial investor may be the best choice.
3. Preparing the company to attract the ideal investor
Investors are looking for well-organized companies with growth prospects. Here's how to prepare your SME for a successful generational transition:
- Financial clarity: Make sure that financial statements and numbers are tidy, transparent, and easily accessible.
- Digitalization of processes: It shows that the company is modern and ready to face future challenges.
- Reduction of inefficiencies: Optimize the warehouse, eliminate obsolete products and improve inventory management.
- Strategic vision: It presents a clear plan that outlines the future of the company, highlighting opportunities for growth.
4. Where to find the right investor?
Finding the right investor isn't easy. The main ways to get in touch with investors in each category are the following:
Private investor networks
I Family Office And the private investment clubs I am always looking for solid SMEs. These investors tend to be discreet and selective, but they offer significant advantages, such as a personalized approach and a long-term vision.
To access these networks, you can:
- Participate in events organized by associations of entrepreneurs.
- Collaborate with advisors who are experts in M&A, who have direct access to these contacts.
Online matching platforms
In recent years, various technological platforms have made it easier for entrepreneurs and investors to meet. These tools offer:
- Access to a wide network of investors: Both financial and industrial.
- Customizable filters: To find the most suitable profile based on criteria such as sector, size and strategic objectives.
- Confidentiality: You can manage your search while maintaining control over your company's visibility.
Examples of platforms include global networks dedicated to SMEs and specific marketplaces for mergers and acquisitions.
The main limitation of these platforms is that they offer a matching service but then they do not support the entrepreneur during the complex transition process, from the initial evaluation of the company, through Due Diligence, to legal support and Closing.
Advisors specialized in M&A
Mergers and acquisitions advisors can play a key role in finding the right investor. They offer:
- Company valuation: To present it in the most attractive way possible.
- Targeted search: They use their network to identify investors aligned with your goals.
- Negotiation support: Ensuring that the terms of the agreement are optimal for both parties.
Collaborating with an expert consultant can accelerate the process and significantly improve the outcome of the transition, also in terms of greater value of the company.
The main limitation of Advisors is that often these figures require high initial costs to start collaborating, which is why many Advisors work only on medium-large transactions and often neglect the SME segment.
5. Networking events and industry fairs
Conferences, fairs and meetings organized by business associations or chambers of commerce represent an opportunity to get in direct contact with potential investors.
These events allow you to:
- Present your company to a qualified audience.
- Establish personal relationships, which are often decisive in investment decisions.
6. Business circles and trade associations
Another valuable channel for finding the right investor is represented by trade associations And come on circles of entrepreneurs. These groups, which can be local, national or international, are structured to support SMEs through networking, training and access to investment opportunities.
An example of a circle could be the entrance to a Business Angel Network, where entrepreneurs present their ideas to a network of private investors, while an example of a trade association could be Confindustria (in Italy) or Federmeccanica for the mechanical industry. These associations can organize networking events, workshops and pitch days where companies can introduce themselves to investors interested in specific sectors.
At Perpethua, we have created an ecosystem of hundreds of investors, financial and industrial, looking for excellent SMEs to invest in. Our mission is to help you ensure the continuity of your company, maintaining your values and vision, while ensuring the economic return you deserve.
Contact us to find out how we can accompany you at this important moment in your life and in the history of your company.
