Episode 19: Before the Letter of Intent
What a Nine-Figure Exit Requires Before the LOI, and Why Most of It Has Nothing to Do With the Buyer
Pat Trysla has been doing deals for forty years, the first stretch as a mergers and acquisitions attorney and the last twenty-two as founder and CEO of Frontier Investment Banking. His firm is referral only. Its clients have run as large as $75 million of EBITDA, and one of them sold to a Berkshire Hathaway company last year.
In this conversation with John Christensen, JD, CFP®, and Cameron Bond, CFP®, Pat describes what a competitive process actually looks like at that scale. On one recent recapitalization his firm took the company to more than 1,500 potential buyers, drew roughly 200 interested parties and over 75 offers, and worked the field down to three finalists. He also walks through arithmetic most owners have never seen: a $100 million valuation, an 80/20 structure, $80 million to the owner at closing, and, because of leverage and tax-deferred rollover treatment, 30 to 35 percent of the go-forward company still owned by the family.
For a family whose net worth sits almost entirely inside one operating business, that arithmetic is the center of the conversation because a sale does not simply convert a company into cash. It permanently restructures the family balance sheet, resets who owns what across generations, and closes a set of planning options that cannot be reopened once a letter of intent is signed.
The through-line is that LOI signature. Before it, nearly everything is still available: price, terms, structure, how the family holds ownership, and what has been committed to charity. After it, though, the list of what can be changed is short.
You can connect with Pat directly on LinkedIn: https://www.linkedin.com/in/patrick-trysla-8512472/
Show Notes
GUEST INFORMATION:
Full Name: Pat Trysla
Title: Founder & CEO
Firm / Organization: Frontier Investment Banking
EPISODE FOCUS:
Business exit readiness, valuation, competitive sale processes, recapitalization, buyer selection, and transaction terms
EPISODE HIGHLIGHTS:
- Why owners should build a business they could keep forever while keeping it ready to sell at any moment.
- What buyers examine in due diligence and why missing systems, controls, documentation, or agreements can reduce value.
- How predictability, growth, competitive advantage, margins, management quality, and industry conditions influence buyer interest.
- Why owner readiness and market readiness are not always the same thing.
- What changes when an owner receives an unsolicited offer from private equity or a strategic buyer.
- Why a competitive process can reveal value and buyer motivation that a one-on-one negotiation cannot.
- How a detailed letter of intent can address major terms before a seller grants exclusivity.
- Why culture, employees, community commitments, and the founder’s future role can be negotiated alongside purchase price.
- When a minority or majority recapitalization may help an owner de-risk while continuing to participate in future growth.
- Why sellers should perform diligence on buyers, especially when the transaction creates an ongoing partnership.
KEY TAKEAWAYS:
- Readiness creates options. Waiting until a buyer appears limits the time available to correct weaknesses.
- A single offer does not establish market value.
- The right exit date depends on both the owner and the market.
- Purchase price is only one measure of a successful transaction.
- Leverage changes after exclusivity, so major issues should be surfaced early.
- A recapitalization can be an alternative to the all-or-nothing choice of selling 100% or continuing alone.
- Non-economic objectives should be defined before buyers begin competing.
- Management quality and reliable information systems can materially affect buyer confidence.
- Seller diligence on the buyer matters whenever capital, control, or future partnership remains after closing.
- The transaction should serve the owner’s broader family, financial, and life objectives, not become the objective by itself.
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