Christopher Riegg is an investment banking professional with more than three decades of experience advising business owners and executives on financial and strategic matters. As a partner at Promontory Point Capital, he has worked with over 200 companies across industries including manufacturing, distribution, technology, and services. Christopher Riegg specializes in mergers and acquisitions, debt refinancing, restructuring, recapitalization, and private equity capital, with significant experience helping companies navigate ownership transitions and long-term growth strategies. His background includes leadership positions with Promontory Point Capital, U.S. Bank, JPMorgan Chase, and L. William Teweles & Co. Holding both the Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA) designations, he has extensive experience guiding privately held and family-owned businesses through complex financial decisions, making business ownership transfers a relevant area of professional focus.
Understanding the Many Challenges of Business Ownership Transfers
Promontory Strategy Group (PSG) is an advisory firm that provides strategic and financial support to privately held and family-owned companies. PSG helps businesses achieve long-term objectives, including the development of effective business ownership transfer strategies. PSG believes that successful business ownership transfers begin well in advance of the formal transaction process starting.
Business ownership transfers rank among the most important phases in the business life cycle. PSG helps owners and leaders evaluate all of their options and begin ownership transitions from a place of strength. By approaching these transactions with decisive, well-prepared strategies, owners can access considerable value while preserving their legacy and ensuring operational continuity. They can also unlock significant value, as opposed to more reactive transition tactics, which often lead to misalignment and an erosion of value.
It is important for business owners and leaders to understand the common challenges that emerge during transition process planning and how to navigate them. First of all, emotional dynamics frequently threaten to outweigh objectivity over the course of the ownership transition processes. This is especially true when it comes to family businesses, though it is not unusual for any business owner to view a business entity as representing decades of personal investment. Stepping down from leadership is not just a financial decision, but a matter of identity. This momentous decision also reflects on the new leadership team, who feel the full weight of expectation to continue operations. Failure to acknowledge these and other emotional characteristics of a business transfer can lead to reactive, misaligned decision-making. It is critical that all parties develop an objective framework and maintain a disciplined disposition throughout the process, with every choice serving the organization’s long-term interests.
Inadequate preparation is another major challenge during ownership transfers. Waiting too long to start planning can lead to many unintended consequences. In terms of timeline, owners should view a transition for what it is: a multi-year process demanding extensive forecasting and pre-planning. Important points of emphasis include the alignment of ownership objectives, strategic evaluations, financial and structural planning, and prepping the business for a third-party evaluation. If leaders need to pause the process at any point due to inadequate preparation, they lose options and suffer from reduced negotiating leverage.
Similarly, leaders who do not clearly define roles and expectations can delay or even torpedo transition processes. Exiting owners, for example, may try to maintain too much control for too long. Alternatively, they might completely abandon the process when the incoming ownership team still requires their guidance. By outlining a clearly defined transition framework consisting of timelines and decision rights, all parties can avoid confusion and complete the transfer of ownership in a timely fashion. The transition framework should also enable an effective transfer of knowledge. Beyond financial statements, incoming owners need to understand important relationships, gain important institutional knowledge, and learn about operational nuances.
Finally, outgoing owners should search for strategic and cultural alignment before engaging a buyer. Otherwise, both parties can suffer from constant friction throughout the transfer process. In addition to the intricacies of cultural integration, business owners should not underestimate the complexity of structure and valuation during transfers.
These are only a few of the challenges PSG can help clients navigate during business ownership transfers. Other pressing matters range from stakeholder uncertainty to the risk of losing key talent. Business leaders can learn more about these topics by visiting PSG online at promstrategy.com.
About Christopher Riegg
Christopher Riegg is a partner at Promontory Point Capital with more than 30 years of experience advising business owners and executive teams on financial and strategic matters. His expertise includes mergers and acquisitions, debt refinancing, restructuring, recapitalization, and ownership transitions. He holds a BBA in accounting from the University of Wisconsin-Milwaukee, an MBA in corporate finance from Marquette University, and both CFA and CPA designations. He is also an active member of the Association for Corporate Growth.
