Glenn Kraft, a self-described “risk-averse accountant by background,” worked his way up through the health care ranks until he found himself at the ceiling of where he could go career-wise and became frustrated. Around the same time, he realized that there was a great opportunity to help hospitals and other providers figure out how to get paid properly.
“In health care, there are 19 formulas and regulations, and it changes all the time,” he says.
So in 2001, he started G2N, which stood for gross to net, that helped hospitals and providers get paid correctly that eventually evolved to include consulting and medical coding.
As time passed, Kraft started thinking about his personal post-G2N financial future. He started a process to explore what he might get for his company and who might be interested. That eventually led him to sell his business to iMedX, an Atlanta-based integrated medical document management and health information solutions company, in 2015.
Speaking at the inaugural Dealmakers event in St. Louis, Kraft talked about how he came to the decision to sell his company and how he prepared his business and himself for the transaction.
Recognizing that his daughters were not likely going to succeed him in the business, and with his and his family’s financial future on his mind, Kraft was interested in knowing what his company was worth.
“I was a pretty good saver and I could see that my money was stacking up, but the imagined value of G2N was only an imagined value,” Kraft says. “And so for me to be able to consider how I might turn that into legacy dollars that will help my family for years to come was really kind of a dream. I really didn't think it was going to happen.”
Kraft says he always kept a SWOT analysis of his business in mind, with particular focus on the opportunities and threats. He was keenly aware that there was a lot of change in the health care industry, especially within what became the predominant revenue stream of his company, medical coding. Specifically, there was a trend toward automated coding with electronic medical records, as well as offshoring coding to India, that posed threats to his company. And that, along with considering what would be best for his family, led him to put his company on the market.
Prepared before the prep
In prepping for a sale, much of the general advice, in one form or another, encourages businesses to get organized. Fortunately, for Kraft, organized is a default setting.
“That's just kind of how I'm built,” he says. “So I didn't realize that I was ready, more ready than most.”
Kraft was able to feed the mountains of data to his investment banking firm, Clayton Capital Partners, on his own because he had that data essentially already prepared. Because he ran his own company, he says it was important for him to understand exactly how he made money.
So he knew from the data room that was built what his company’s profit and risks were by type of business, which enabled him to be very prepared without needing to exert the energy and time to build a data room from scratch.
More than one ending
After the sale of his business to iMedX in 2015, Kraft says he’s grateful for the way it all turned out. However, he says he’s also keenly aware of how many ways that it might not have worked — that he could have gone through that process and not have found a buyer.
Even as he prepared to exit the business he built, he also thought of how he could change his attitude toward how he would work in the business if he didn't sell it, how he could work differently. And that helped him realize that he wasn’t headed toward one inevitable end, and that the outcome, no matter how much planning went into it, couldn’t be scripted.
“It's not always a cliff you're heading up to. It’s an opportunity,” Kraft says. “And looking at whether that opportunity happens, be a little bit indifferent because you can't fully control it, even though most of us would like to.”