Preparing for Further Success

If you continue to be successful, sooner or later your business will hit its natural ceiling. It will have reached as far as it can without radically extending its objectives, taking on considerably more staff, and becoming another animal. This invariably means raising a great deal more cash.

Whether you elect to do this by becoming a quoted corporation or striking some private deal, restructuring inevitably means exchanging a large part of what you have now for a lesser share of what you have next. The expectation, of course, is that the value of this lesser holding will become infinitely more valuable.

If you are in a position to take the public company route, you will be offered all the advice you may need from the merchant bank you retain to handle your flotation. Unfortunately, software houses are 100 times more likely to receive a takeover offer out of the blue. If, like the majority, you come to some private arrangement, you may or may not gain what you expect; especially if the buyer has, unbeknownst to you, been stalking you with an eye to taking you over.

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