Build a Shareholder Liquidity Plan
A Primer for Privately-Held, Family-Owned Business
You Need A Shareholder Liquidity Plan If You Have:
Early investors clamoring for liquidity
Investors demanding increased dividend income
An upcoming leadership or generational transition
A need for outside equity capital to support growth
A founder or CEO looking to transition or retire
Shareholders pushing for an IPO or sale of the company
A desire to provide liquidity to employee shareholders
Large shareholder concentration
Conflict between shareholders
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Developing a Shareholder Liquidity Strategy
For private and family-owned companies, decisions about when and how to provide liquidity for shareholders can have significant implications for a company’s growth, operations, and culture. Whether driven by a desire for diversification, the death of a founder, a generational transition, or to resolve shareholder disputes, the method(s) for providing liquidity can shape a company for generations.
Leaders that take a long-term, proactive approach to planning for liquidity needs are better positioned to deliver value to shareholders and avoid challenges arising from uninformed, poorly timed, or poorly executed liquidity strategies.
To develop a long-term liquidity plan, you should follow this three-step process:
Define goals: Understand expected shareholder needs including liquidity triggers
Assess capacity: Evaluate ability of your business to meet expected liquidity needs
Evaluate options: Identify options and consider the benefits and considerations of each
This guide is designed to you think strategically about liquidity: defining goals, evaluating alternatives, and integrating liquidity planning into overall business strategy so that capital decisions support your company’s long-term vision and maximize value for shareholders.
Have You Explored All of Your Potential Liquidity Options?
Company-Funded Options:
Company-funded tender offer
Regular dividends
Special or One-Time Dividends
Private Market Options:
Company-funded tender offer
Regular dividends
Special or One-Time Dividends
Public Market Options:
Initial Public Offering (IPO)
Special Purpose Acquisition Vehicle (SPAC)
Mergers & Acquisitions
Sale of the Company or Leveraged Buyout (LBO)
Employee-Funded
Employee Stock Ownership Plan (ESOP)
Don’t Leave Anything to Chance!
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About Keene Advisors
Strategic and Financial Advice, Global Impact
Keene Advisors is an independent investment bank and strategy consulting firm built to serve private, founder-led, and family-owned companies. Our focus and experience gives us a deep appreciation for the unique dynamics that drive private, family-owned, and mission-driven enterprises.
With hundreds of successful client engagements, and experience advising on over $45 billion in mergers & acquisitions (M&A), capital raising, and restructuring transactions, our team brings unparalleled insights and a proven track record of success to our clients.