|Pitch new clients using potential buyer list||Closed two deals|
|Reach out to larger firms||Received overwhelming interest in recent automotive deal|
When Mike Greengard had made a career out of buying and running several businesses, his wife made an observation, “You love the hunt, but once you catch it, you get bored.” He knew that the day-to-day trials of managing a business were not his strong suit – “I was not a particularly good operator, but I really enjoyed the deal.” So Mike set out to figure out a way to buy and sell businesses without owning them – he became a broker.
After a successful stint at another firm, Mike went out on his own to found business brokerage Praxis six years ago. The team grew from just Mike and an associate to a team of five and from representing main street businesses to listing manufacturing firms, distribution, service, retail and IT. Now the team represents 20 exclusive deals at any given time with the top firm selling for $20M.
They have built their reputation and business through their collective years of experience. “We’re all older guys who’ve been doing this for a while. We were all in industry before, so we understand what it takes to run a company.” The team spends much of its time counseling business owners: “Most deals fall through because of seller misrepresentation or the seller taking his foot off the pedal. So we give a lot of pep talks once the decision is made.”
Mike and his team have sold more than a hundred businesses, they know how to field interest from all types of potential buyers – from search funds to private equity firms. With private equity, the returns required for the buyer often mean that they want to pay less than the seller needs to accept. “They have required returns and often have to relocate expensive executives so those offers don’t make sense for the seller.”
One of their key strategies in parsing through interest for the best deals is to get a concrete value for the business, so they can quickly move past buyers who can’t make the numbers work. “We do a really good business evaluation. The work-up is based on 100 sales and knowing the market.”
We’re all older guys who’ve been doing this for a while. We’ve worked in industry, so we understand what it takes to run a company.”
The majority of the businesses that Praxis represents are sells are to owner-operators with under $5M in revenue. For their largest deals, those that will be run by a third party, they use Axial. “When we get larger businesses that are a good fit for Axial, ones that will appeal to the buyers on Axial, we post it there exclusively…And believe me, they come in.”
“When I go out on listing calls, like I did earlier this week, people say, ‘How do you find buyers?’ And on the bigger businesses, I say there’s a plethora of websites, but by far the best one is Axial. The prospective sellers are very impressed.”
Praxis has already sold 2 businesses through contacts they made on Axial and have more coming up.
“Axial is best for our larger deals. Sometimes it’s even too much interest, but that’s a high quality problem to have.” One recent automotive deal, started with an overwhelming response, but eventually ended in a closed deal this June. The funnel to the completed transaction included:
Overall, Mike and his team work with Axial to connect to the wide range of buyers for their largest deals. “In terms of the things Axial does and the creative things Axial is trying to do now, we are really impressed.”
“Axial is best for our larger deals. Sometimes it’s even too much interest, but that’s a high quality problem to have.”