9.2 Flashcards
1 Harvest Strategy
1-3
1 Initial Public Offering (IPO)
- via stock exchange
- Post-exit: founder may stay engaged if required/implemented
- reward +++; complexity +++
- e.g. Facebook, zalando, amazon
2 Acquisition/tradesale by another company
- complementary products or competitor
- Post-exit: Less engagement, continued employment possible
- rewards ++; complexity ++
- e.g. Whatsapp (facebook), wunderkinder (microsoft)
3 Acquisition by financial investor
- Investor sells company at a premium in short time
- rest wie bei 2
- e.g. TeamViewer (Permira)
Positive Influences for Harvest Strategy
1 Entrepreneur
2 Company
1 Entrepreneur:
- extrinsic motivation
- causation decision logic
- high education
2 Company
- high innovativeness
- high performance
2 Stewardship Strategies
1-3
1 Family succession
- low reward, medium complexity
- high likelihood of engagement in formal/informal position
2 Entrepreneur / Management Buy out (EBO, MBO)
- medium reward, medium complexity
- Post-exit: engagement decreases slowly over time
3 Independent Sale
- medium reward, medium complexity
- Post-exit: no engagement
3 Cessation
1-2
- voluntary cessation
- venture is voluntarily shut down, not bankrupt
1 Liquidation
- low reward, low complexity
- Post-exit: no engagement
2 Discontinuance
- low reward, low complexity
- Post-exit: no engagement
Family Sucession
+ (3)
- (3)
+ long-term influence of CEO
+ long-term training of successor
+ stability of business
- limited outside knowledge
- conversativsm in strategy
- little/no compensation
EBO / MBO
+ (3)
- (3)
Entrepreneur / Management Buy out (EBO, MBO)
+ can use experience to govern firm
+ stability of business
+ low to medium/fair compensation
- limited outside knowledge
- CEO chooses successor
- limited long-term influence
Independent Sale
+ (2)
- (2)
+ outside knowledge/expierience
+ low to medium compensation
- potentially little change
- limited-longterm influence
Process Family Sucession
1-3
1 establish goals
- collective vision
- personal retirement goals
- goals of next generation management
2 establish succession plan
- establish governance process
- identify sucessora
- identify active/non-active roles for all family members
3 create transition plan
- option: purchase, gift, combination
- buy/sell agreement
- financing options
- timeline for implementation
Process MBO/independent Sale
1-5
1 identify new CEO
- new management
- appoint financial/legal consultants
2 conduct valuation
(3 secure additional financing)
4 conduct due diligence
- ensure financial infos are correct
- tax liabilities
- asset ownership
5 finalize negotiation
- sign final agreements
Criteria for Sucess
Family succession
1-4
- succession plan
- training of successor
- alignment of family interests with successor
- balanced financial interests between CEO and successor
Criteria for Sucess
EBO/MBO
1-3
- identification of employee/manger willing to purchase company
- fair pricing
- financial resources for purchase
Criteria for Sucess
independent Sale
1-4
- long-term interest of individual
- fit between company and outside individual
- fair pricing
- financial resources for purchase
IPO
+ (4)
- (4)
+ liquidity
+ financing
+ standing & reputation
+ higher attractiveness
- higher costs due to reporting
- high transparency creates stress
- high transparency creates advantages for competitors
- stock law
Akquisition by another company
+ (4)
- (4)
+ cash-out
+ short execution time frame
+ maintenance of confidentiality
+ competitive bidding/negotiating power
- shareholder/management conflict
- potentially destabilizing for employees, clients, suppliers
- binds management resources and distracts from daily operations
Process of IPO
1-4
4-8 months to several years
1 prepare company
- emissions concept
- consortium bank
- contracting CAs/consultants
- due diligence (financial statement, balance sheet)
2 creating authorized capital
- managing/supervisory board
- applying for capital increase
3 preparing for stock market
- Image campaign
- required documents
- press conferences
4 stock market introduction
- application for admission
- determining price
- stock market notification
