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Private Capital Markets: Valuation, Capitalization, and Transfer of Private Business Interests + Website, 2nd Edition by Robert T. Slee

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CHAPTER 35

Business Transfer: Conclusion

This chapter concludes the transfer section of this book with a number of observations that build on information provided throughout the preceding chapters. Because the ability to transfer a business interest directly affects the value of a business, owner-managers must understand the ramifications of this value-transfer relationship in the private capital markets. Further, the choice of transfer method often connects with specific types of capital available to support a transfer. The foregoing chapters described the fundamental concepts underlying the transfer of private businesses. This chapter builds on those fundamentals with a discussion of these issues:

  • Transfer activity is segmented in private capital markets allowing for an arbitrage opportunity.
  • Owner motives choose the range of values available for a transfer.
  • Creating value in a private business requires planning.
  • Transfer is triangulated to valuation and capitalization.

SEGMENTED TRANSFER ACTIVITY AND ARBITRAGE

There is no unified transfer market in private capital markets. Rather, the market for transferring business interests is segmented into several levels where the transfer is likely to occur. Each level has more or less access to each of the disparate capital access points, value worlds, transfer mechanisms, and market mechanisms. Each separate shop in the bazaar called the private capital markets can be accessed through various segments or levels. There is an overlap ...

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