While capital is often the commodity in a sell-side transaction, it's also important to determine up front with the ownership group the priorities for not just a successful transaction, but to feel good about that sale. Aspects such as price, certainty and timing of the closure are important, says Foundation Wellness CEO Sean Williams, but they're the basics. There are often more important issues.

To illustrate, Williams, during his panel on maximizing value in a sell-side transaction at the Cleveland Smart Business Dealmakers Conference, moderated by Gridiron Capital Managing Director Sean Kelley, talks about his experience with the consumer products company Faultless Brands he headed. As that company considered a transaction, it was important, as a family company that's been in Kansas City for over 100 years, to stay in the city.  

"This family really cared about their employee base, and a lot of people have been there for a long time," Williams says. "So, the certainty of keeping that company in Kansas City — what are the plans for these new owners with the company with the headquarters? What are the plans for the people? Do they plan to keep the people? Do they see an overhaul? Not everyone will tip their hand as a buyer. But those were important aspects that we were looking for."

Another consideration is the quality of the buyers, particularly in terms of their values. That means working to determine if the buyers really care about the people and whether they're people with whom you'd like to take your company to the next level. To determine that, they had to get together.

"You're in those meetings where there are some groups that are really interested and authentically care about learning," he says. "There are some groups that you meet with that want to ask questions that show how smart they are and don't really come across as the people that truly and genuinely and authentically care about what you provide and what your business is and the people."

Williams says his current company, Foundation Wellness, recently bought a smaller business owned by a couple who ran it in a very competitive space. He says the couple wanted a buyer who would take care of their brand and grow it. But they really wanted to make sure that it was going to people they could trust and who they liked.

Williams' approach was to make sure that the owners understood that Foundation Wellness cared about the people and the brand. They acknowledged all the great work, the blood, sweat and tears they put into managing a business in a tough category, while making sure that, as buyers, they showed their appreciation for all the work that they did.

"Being on the other side of that and understanding how important some of those aspects are and how you come across to a seller is really something to think about," Williams says. "And making sure that your entire team that touches those buyers really behaves and drives value and shows up the right way, that is of interest to them."

Gridiron Capital Managing Director Joe Saldutti says, as a private equity investor, what attracts him to businesses and helps him prioritize investing in one company versus another is when it's a great business with great people and a winning culture. But equally as important is being the right partner for that business.

"There are a lot of great businesses that we might not be the best partner, we might not be able to help grow with our expertise that specific business," Saldutti says. "And it stuns me sometimes that businesses that are looking to sell, they put themselves in these processes that are very short. They get to meet the buyers for one afternoon or a dinner, and they don't really do too much diligence. They've spent their whole lives building their business, they're very proud of it, and then they do very little diligence."

He says he encourages those who are thinking about selling their business to start doing diligence now by exploring the buyer ecosystem and those relationships.

"The owners should do a lot of diligence on folks like us," he says. "They should talk to every CEO that we've ever helped because it's their legacy that they're entrusting in someone else's hands."

On the sell-side, Aon SVP and Partner, Aon People Transaction Advisory Services, Perry Papantonis, stresses that seller preparation creates value and drives value. While there's standard preparation for the business that could include getting the corporate governance documents in order and getting the cap table up-to-date, it's also important for business owners to get their house in order as it relates to human capital in part by uncovering the personal goals of those on their management team, as well as their own.

"When you look at the workforce issues, both at the management team level and below, I always say, I can't get to the we issues until I understand the me issues. And as a result, it's thinking through, from a founder-owner perspective, what are your non-negotiables? What do you expect your role to be following a transaction? Typically, a buyer isn't going to necessarily tip their hand, but if you've captured your non-negotiables or what you're willing to do — do you expect to be the CEO? Do you expect to be a consultant at a minimum of 20 hours a week — whatever it is, capture that, drive the negotiations to the extent you can by reflecting your non-negotiables — whether its headquarters remaining in a certain jurisdiction for a period of time, whether it's minimum benefits and pay, whatever it is — capture that, try to drive the initial iteration of the of the merger purchase agreement and have those reflected. And don't bring those up at the last minute."

Papantonis says as management teams working on management presentations are brought under the tent early, they also will be thinking about the me issues. Owners should have a plan to address those, whether it be change control, severance or anything else. Have those ready to go, he says, and then have a plan for the broader workforce so they're more willing to stay, which preserves value for the organization.

"Have that orchestrated very well so that you're not getting blindsided by questions you didn't anticipate," he says.