Selling Your Creative Business – the headlines with Jo Evans

In the first episode of the series, Joe and Ayesha chat to Jo Evans, Lewis Silkin’s Chair and Corporate Partner. Jo has more than 20 years’ experience advising sellers across a range of creative sectors including marketing, PR, communications, gaming, digital, and media.

Key takeaways:

• Before a sale, make sure your cap table reflects how you want sale proceeds to be shared amongst the shareholders and option holders. A couple of years out from a sale, you can usually still make adjustments without undue tax complications, but this gets trickier further down the line.
• If you have EMI options, health check them well in advance of a sale. Again, this will allow you to correct any mistakes as tax efficiently as possible and will also prevent delays.
• Try to get ahead of other potential due diligence issues – make sure you have signed contracts in place with key customers and suppliers and re-visit your employment agreements and policies, freelancer contracts (particularly around IP assignment), IP protection position, data protection protocols and general compliance. Though they may not prevent a deal, these issues can cause delays or drive a price chip.
• Ensure that you understand the personal ambitions and expectations of different groups of shareholders and option holders and that you’re aligned on what a sale might look like for each of those groups. Some sellers might want to cash out completely and move away from the business. Others, such as the next tier of management, will stay on and will need to be incentivised after the sale. After all, creative businesses are all about people and without the right people, the business doesn’t have the same value for the buyer.
• If you are a well-run, profitable creative business, you're likely to get approached by potential acquirers. So, if a sale is something that you envision as a possible future plan for your company, be prepared for that approach: run the business properly from the outset so you're not trying to tidy things up later.
• Don't take your eye off the ball of running the business during the sale process. If the sale doesn't go ahead or is delayed, you must be able to pick up the reins of the business and carry on. Often, this comes down to resourcing – make sure that someone is responsible for managing the deal process so that the whole team isn’t getting sucked in.

Click here to listen to the podcast on Spotify.
Click here to listen to the podcast on Apple Podcasts.
Click here to download the full transcript.