Increasing Your Company’s Valuation

Selling  may be years in the future, however, the most successful companies have instilled a discipline to constantly be making important daily decisions with the perspective of how each will improve their company’s valuation.  CEOs are continuously juggling dozens of issues to make their company more competitive, grow faster, and become more innovative, efficient and profitable.  Ultimately as the CEO achieves improvements the firm becomes more attractive to potential buyers.

In the face of the complexity and priorities of the day to day operation of the business, many CEO’s lose sight of the big picture, over-riding strategies and balancing their limited resources for maximum effectiveness.  In observing companies that seem to perform consistently well and ultimately exit successfully we notice some common traits.  One of those that stands out is they have put in place a strong Board of Directors or Board of Advisors.  Having a solid Board who bring their commitment, expertise and contacts to help achieve your goals is invaluable.

Many small companies overlook this important resource, and if they do create a board it’s filled with insiders.  A good board brings discipline, objectivity, strategy, ideas and access to resources beyond those you’re aware of on your own.  They hold the CEO accountable to maintaining strategy, measuring progress and help them access resources limiting the company’s success.

The quality of your Board (or the lack of one) reflects directly on your company.  When it comes to being evaluated by outside investors, potential buyers, business partners and customers; having a solid Board with a pedigree from other successful companies adds credibility.  It improves sales and substantially improves your company’s valuation.  Investors give you that extra measure of respect and consideration.

We read a great blog post written by Brad Feld, a Managing Director at the Foundry Group, on this topic this week and thought that you might find it to be as interesting and insightful as we did.  Foundry Group is a venture capital firm with a focus on investing in early-stage information technology companies (Zynga, Fitbit, and others) and turning them into hugely successful ventures.

Click > What Makes an Awesome Board Member?

If you are interested in finding out about other strategies that you can use to build a strong company, give us a call at 416-483-9400 or send us an email.  We’re always happy to have an informal conversation.

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