Congratulations! You've navigated the exciting, and often challenging, world of mergers and acquisitions (M&A) and successfully sold your company. But the story doesn't end there. The traditional "sell and walk away" model is becoming increasingly uncommon. Today's founders have a multitude of options, and a well-structured post-sale strategy can unlock significant financial and personal rewards.
At Evergreen M&A, we understand that selling your company is a deeply personal decision. Our commitment extends beyond closing the deal. We guide our clients through every step of the M&A process, including crafting a post-sale strategy that aligns with your individual goals. If you have questions on your post-sale role, you can reserve time directly on our President Gary Behler's calendar or email gary@evergreenforfounders.com.
The Evolving Founder Landscape
Many Clinical Research Site founders hold the misconception that a successful exit translates to a clean break. But the landscape is shifting. Strategic buyers are increasingly seeking experienced leadership and institutional knowledge to ensure a smooth transition and propel future growth. This presents a unique opportunity for sellers to leverage their expertise and remain involved with their creation.
Your Options After the Sale
Let's explore some of the most common post-sale scenarios for founders of Clinical Research Sites:
- Advisory Role: Provide strategic guidance and industry insights to the new ownership.
- Operational Leadership: Remain actively involved in day-to-day operations, ensuring a seamless integration.
- Subject Matter Expert: Utilize your in-depth knowledge to train the acquiring team and maintain product/service quality.
- Research & Development Lead: Continue spearheading innovation efforts and securing further funding for vital studies.
Financial and Operational Advantages
The benefits of an active post-sale role go beyond personal fulfillment. Here's how it can be advantageous for both you and the buyer:
- Reduced Risk for the Buyer: Your continued involvement minimizes disruption and knowledge gaps, leading to a smoother integration and faster ROI for the acquiring company. This can translate into a more favorable financial package for you.
- Lower Integration Costs: The buyer avoids the hefty expenses associated with recruiting and training replacements for key personnel, including yourself.
- Continued Growth Potential: By leveraging your existing expertise and relationships, you can facilitate a more efficient scaling-up process, benefiting both the company's future and your potential for additional performance-based compensation.
- Securing Funding for R&D: Imagine the possibilities! Your continued involvement as a research leader can bolster your credibility when seeking further funding for critical studies. This translates into potentially life-changing advancements in your field and a company well-positioned for continued success.
Commanding a Higher Multiple
Your decision to stay on post-sale demonstrates a deep commitment to the Site's future. This translates to a reduced risk for the buyer, incentivizing them to offer a higher acquisition multiple.
Structuring the Deal for Success
Not all post-sale roles are created equal. Negotiating the terms of your continued involvement is crucial. Work closely with your M&A advisor to negotiate and structure a deal that reflects your goals:
- Define Scope and Responsibilities: Clearly outline your specific role and responsibilities within the new structure.
- Compensation: Negotiate a base salary, performance-based bonuses, and any potential earnouts based on future company performance. Most M&A deal structures include a form of rolled equity for the entire platform's performance as well.
- Term Length: Determine the ideal duration of your involvement, considering factors such as the complexity of the integration process and your personal objectives.
Case Study: A Smooth Transition and a Bright Future
A client of ours is a passionate physician and principal investigator who founded her Clinical Research Site in 2021 with a mission to address a critical gap in access to clinical trials in an underserved community. Located in Texas, the site specifically aimed to serve an underserved demographic lacking access to vital clinical trials in her area of expertise. Recognizing the need for a growth partner, the doctor sold her company to a strategic buyer. This move not only provided financial security, but also allowed her to continue her mission on a larger scale. By structuring the deal with a mix of cash upfront and significant equity in the acquiring platform, together we ensured her continued stake in the company's success. Importantly, she also secured a role as a subject matter expert, leveraging her deep knowledge to benefit the entire organization. This case exemplifies how Clinical Research Site owners can craft a post-sale strategy that aligns with their goals, ensuring both personal fulfillment and continued impact within the research landscape.
The Bottom Line
The decision to remain involved after selling your Clinical Research Site is a strategic one. By carefully considering your goals and working with an experienced M&A advisor, you can craft a post-sale strategy that secures your financial future, allows you to contribute to the continued success of your creation, and potentially make a lasting impact in your field of research.
At Evergreen M&A, we are dedicated to guiding founders through every phase of the M&A journey, ensuring a successful outcome that exceeds expectations. You can book time directly on Gary Behler's calendar here or complete the form below for an introductory consultation and discussion of your exit strategy.
Why Evergreen M&A?