The majority of successful exits for companies are via trade sale (not that given the media hype you’d necessarily imagine it was anything but IPOs). Furthermore the percentage of companies that list on an exchange is falling meaning, that along with the economic circumstances, private companies and remaining in the unlisted space is becoming ever more important.
In this episode we dive into the whole soup-to-nuts process of how to trade sell oneself, what the stages are, what the obstacles and challenges and what the benefits are. Trade selling a company is an eternally important route to not just realisation but to the growth of the company’s vision being realised. Thus this is a reference episode for something that every founder should understand whether they get to this stage and go this route or another. It’s one that can’t be ignored – least of all perhaps in the current economic climate.
Goji were on the LFP way back in the day in LFP047 in 2016 when the founder Jake Wombwell-Povey was discussing the Innovative Finance ISA and David was employee number one. He moved on to become first CTO then CEO and is now at the last stage – regulatory approval – for Goji’s merger with the giant Euroclear – such a vital component of the whole global post-trade financial infrastructure.
So along the way Goji must have done a thing or two right – IF ISAs hardly being a huge thing these days with so few P2Ps remaining of any stature. Further correlating this is that Euroclear approached them.
Topics discussed include:
- running. A long way.
- having worked with a former guest on the LFP who also liked running quite some way
- how best to avoid injuries
- social company and running, running a hundred miles
- being a later developer re extreme fitness
- David’s career journey
- transitioning from being a CTO to CEO
- Goji’s mission to increase access to private markets
- the IF ISA
- motivations for realisations as critical for the eventual choice of route of which way one ‘realises’
- private equity as an exit route
- changes in the private equity markets and how the firms operate
- differing motivations between private equity acquisition and incumbent acquisition
- completing a gap in the coverage of an incumbent as a great trade sale case
- ability to scale exponentially differs hugely between “just IPOing” and – as in Goji’s case becoming part of one of the worlds largest firms moving into their arena
- dating ,mating and marrying as it applies to looking for a Trade Sale parameter
- differing paths to finding a Trade Sale buyer
- grows naturally out of a commercial relationship – banks often use this route – grows more organic — cf after knowing a colleague for years getting into dating and mating – there is a lot of mutual knowledge in the first place
- marriage brokers – investment banks, consultancies, accountants
- increasingly incumbents have their own teams scouring for appropriate acquisitions (as in this case with Goji who were approached by Euroclear)
- planning versus reacting for a Board re exit strategies
- both happen 🙂
- “looking good”
- due diligence
- the role of Unelected Power (aka regulators) as being increasingly important in the 21stC
- Goji need to get FCA approval to be bought by Euroclear (?!) which takes 4-6 months (!)
- commercial approach whilst awaiting regulatory approval
- “after the wedding” – life continues
- degree of integration/distance with the new owner
- cultural alignment and importance thereof
- documenting some of the above in the trade sale legal documentation
- incumbents – esp 10 ton gorillas – don’t necessarily want to absorb acquisitions entirely into the Borg Cube but rather retain the benefits of a rapidly reacting entrepreneurial subsidiary
- Goji’s products
- Goji is hiring
- trends in the global marketplaces and technology in re private markets
And much much more 🙂
Share and enjoy!