Pre-exits are hot. This is the conclusion of the investor TransEquity Network from Den Bosch. More and more business owners are considering selling all, or part, of their business at an early stage. According to managing partner Jurgen van Olphen, this has to do with the rapidly changing market that requires entrepreneurs to adapt faster and faster in order to continue growing. The enormous technological developments are also difficult to keep up with and require extra capital to invest. Another aspect is that the playing field has become increasingly international, which increases competition. “Not every entrepreneur has the energy for that rat race,” concludes Van Olphen.
New generation of entrepreneurs want more than work
In the past owners used to keep their company until they were eighty years old and their children gradually started to take over, however, the new generation of entrepreneurs has a different view. Entrepreneurs between the ages of 40 and 60 are initially curious about what their company is worth and come to the conclusion that their lives will be a lot more pleasant if they dare to let go. In the fifteen years that his company exists, Van Olphen sees more and more entrepreneurs for whom the operational work becomes unattractive. “They are still entrepreneurs in heart and soul, but they are done with the operational tasks and the 50 or 60-hour working week that comes with leading a medium-sized company.”
Banks finance less, the role of private equity is increasing
Responding to this new generation, another import trend emerges according to TransEquity Network. Where previously banks financed everything, private equity parties are now on the move. According to Van Olphen, private equity sometimes sounds a bit scary to some entrepreneurs. “But it turns out to be much better in practice than, for example, a large bank. There are private equity parties that actually cooperate with, and assist in running, the company. As a result, the owner does not have to worry about the ‘operational hassle’ and can safely distance himself from his child.”