In this presentation, Rob McLeod of Bigelow shares the results of a survey of 75 private‑company owner‑managers about what matters to them in a merger‑and‑acquisition (M&A) deal. Respondents rated 13 possible deal characteristics; the two most important overall were high valuation and personal freedom, while ten other attributes received more than 50% strong interest and only future upside fell below that threshold. McLeod emphasizes that averages mask substantial individual variation, illustrating this with two contrasting personas: “Mary,” who prioritizes valuation and freedom but cares less about culture and stability, and “John,” who values management incentives, employee sharing, and cultural continuity over price. He then presents hindsight feedback from veteran owners who have completed transactions, noting that confidentiality, legacy/reputation, and communication with constituents were less critical than they had feared, whereas future upside deserved more attention. The veterans also offered contradictory advice, underscoring the uniqueness of each owner‑manager’s situation. The key takeaway is that advisors must listen to each owner’s specific motivations and craft solutions beyond pure financial terms. McLeod directs listeners to Bigelow’s online resource library for further owner‑manager content.
Chapters
Hi, I'm Rob McLeod with Bigelow. At Bigelow, we work with private company owners, what we call owner-managers, to help build and capture value of their privately held businesses. One of the joys of our practice is working with owner-managers and seeing how much they care so deeply deeply about their communities, their employees, their management team, their customers. We decided it was time a year ago to do a survey and put some scientific scholarship around what do owner-managers really care about in light of an M&A transaction. We provided 13 characteristics, we received 75 respondents, and the statistical significance is that owner-managers care most about high valuation and personal freedom. The real question though is, What about the rest of the characteristics? What we found is that over 50% of our respondents felt deeply about 10 other characteristics. The only one that didn't get more than 50% of the respondents was future upside. So what are the practical implications of this? Well, we like to look at it and say, yes, valuation and personal freedom are very important, but there's a whole host— another 10 characteristics that owner-managers care deeply about. So the second question we asked is, do owner-managers care about the same things to the same degree, or do averages obscure? Is it even helpful to take an average of unique responses and learn from it? We think the answer is yes, but you got to do it with a dose of heavy professional skepticism. Here's the listing of the characteristics with the average responses from our participants. But I want to tell you two stories, one about Mary and one about John. Let's take a look at Mary's responses. She's off the charts on valuation and personal freedom, but look how she dips below the average line for culture or future stability. How about John? John's almost the mirror opposite of Mary. He doesn't care much about valuation or personal freedom. He's all about incentivizing his management team, sharing with his employees, and making sure that his culture continues on unabated after a transaction. We tell you these stories because just like Mary or John, you probably have some unique concerns as well. And owner-managers, they care a lot about these characteristics and they feel differently about each one. We also asked seasoned owner-managers, those that had been through a transaction, to give us hindsight. Could we learn from some of their responses before a transaction versus after a transaction? And it's interesting, what we found is there were 4 characteristics that owner-managers who had been through a transaction rated as less important. We read this to mean that they shouldn't have been as worried about these, and they are confidentiality, future legacy and reputation, as well as communicating with constituents. The one hindsight where folks said they maybe should have paid a little bit more attention was future upside. We also asked the veteran participants, those who have been through a transaction, to provide any other insights to owner-managers. I want to read a couple of quotes to you. Do not stay back ever. New owners will make changes and you have no control. Here's a different one. I was worried about agreeing to run the company as an employee of the new owner. Turned out the new owners were great to work with and I stayed with them much longer. Than anticipated. How is it that these two owner-managers, when asked a single piece of advice that they would give to you, another owner-manager, thinking through your own personal and professional journey, that they would give you the polar opposite advice? And I think that this is emblematic of beware of the end of one. What one owner-manager experiences is not what another owner-manager is necessarily going to experience. And what this implies to us is that unique owner-managers have different companies, different industries, different competitive dynamics, and what works for one is not necessarily going to work for you. So what are the implications of some of this research? Why did Bigelow do a statistical analysis of owner-managers about what they care about? And what we have found is, is that owner-managers care a tremendous amount, a lot more than just about the money and the value of their business. They care about a whole host of other characteristics. And we think the implications for owner-managers are that you need to find an advisor that listens and appreciates your individual motivations and finds a solution that matches your individual needs. If this IP was helpful and you'd like to learn more, we have lots of owner-manager content. You can find it at BigelowLLC.com. In our EOM resource library.
