Brian McDonald from Bay Advisory joins the show for Part 1 of a 2-part series on M&A and raising capital for SMEs and talks through the intersection of experiences that drove him to launch Bay Advisory, market trends impacting early-stage entrepreneurs in Europe, and helping entrepreneurs think about their options in taking money off the table.
This episode of MoneyNeverSleeps is sponsored by PAT Fintech, the training partner that demystifies fintech and digital finance for financial services professionals.
Brian is the Managing Director at Bay Advisory, a team of corporate finance specialists who apply their knowledge and expertise to the tech sector, helping these small and medium enterprises sell and fundraise at the best value. Continuing along the theme from recent episodes of looking at entrepreneurship downstream from where Eoin and Pete ply their respective trades, we thought it was a good idea to get seed-stage founders and other entrepreneurs in our audience thinking about their options down the road.
On the early days: “One of the best things that happened to me was not joining Big 4 from the start, as I had to learn everything from scratch, and I got a lot of experience with very small businesses where I was just handed a box of receipts.”
On his inspiration: “With my experience in consolidating SMEs into bigger firms, I could see a lot of small businesses that were poorly advised from a corporate finance perspective, and at the same time I was personally investing in early-stage technology businesses. I could see that there was a requirement in the market for a specialist corporate finance house prepared to take on much smaller businesses.”
On his approach: “What we try to do with Bay Advisory is bring the professionalism and the rigor of a large corporate finance house to small businesses.”
On aligning with your investors: “If you’re setting up a business in Ireland and your intention is to quickly go to the US market, then you want to make sure that your seed investors can actually invest in a US business.”
On current market trends: “While volumes of venture capital have stayed relatively strong in Europe and elsewhere, that hides the fact that a huge amount of capital is going into Series B and Series C rounds, and seed rounds are really struggling. Angel investors are really pulling back in Europe, and we’re seeing that in Ireland as well. We are potentially not funding very credible businesses and very credible founders who should be funded and would be funded in any other economic environment.”
On trying to dig deeper into an entrepreneur’s thinking: “Very often, when an entrepreneur comes to me and says ‘I want to sell the business’, what they really mean is ‘I want to de-risk’. Usually, they think their only option is to sell everything to a PE firm and walk away. Other times, what they really mean is ‘I’m working too hard here and I want to have a family life again’. There are other ways of fixing that that don’t involve selling the business."
On selling a small business “The crucial part of getting a business sold is being prepared to walk away and having another option that’s acceptable. When you get to the business end of a deal, there’s always a last-minute hitch. Every single time there’s something that happens, and it can be a rollercoaster, but you have to be prepared to walk away.”
On what he’s learned along the way: “A big lesson I’ve learned is to show empathy and really understand the journey that founders have been on. It’s an emotional journey to sell a business that you’ve poured your heart and soul into for ten years.”
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