Published March 16, 2012

Assisting Family Businesses in Generational Transitions

By Paul Wormley

We have worked with a number of families to pass a family business from the first generation to the second generation. In each case, the families faced a familiar but intractable problem: generation one needs to sell the business for cash in order to comfortably retire but generation two does not have enough money to buy the business.

In our experience, the second generation also wants to keep growing and improving the business and, in many cases, has good, concrete ideas but lacks a partner that can help them execute the ideas.

Hadley Capital has helped multiple family business address this dilemma:

  1. We partner with the second generation to acquire the business, funding the transaction with substantial cash at closing. The first generation is able to comfortably retire and the second generation participates as meaningful equity owners.
  2. We work with the second generation to develop and implement a growth plan; as equity owners, the second generation benefits from the resulting increase in value.
  3. The family business identity and legacy is perpetuated and the second generation gains an experienced and rational partner in Hadley Capital.

Hadley Capital has more than a decade's experience buying, owning and improving small businesses. Our ownership model is well aligned with many family businesses: we are good stewards of our companies with a long-term focus and an interest in improving and growing our companies, creating opportunities for management and employees and equity value for owners.

I was at dinner last night with a second generation family business owner. She said that she didn't know that "guys like you were out there" and that we might be able to help her family business. If you are an owner of a family business that is facing this dilemma, we are out here, give us a call and we can discuss how we might be able to help you.

Paul Wormley - General Partner

Paul joined Hadley Capital in 2005. He has spent his entire career working with small and emerging companies. Paul grew up in a family business environment and is an owner of his family’s community newspaper business. Paul works with GT Golf Supplies, Pneu-Con, Open Sky Media and Centare. He was the chairman of the board of directors for i-deal Optics, a previous Hadley Capital company.

Paul is an outdoor enthusiast who enjoys fishing, hunting, riding motorbikes, Crossfit and an occasional craft beer. He works closely with a number of non-profit organizations including One Acre Fund and Trout & Salmon Foundation, and serves as chairman of the Finance Committee at his church.

Paul is a graduate of the University of Colorado at Boulder and received an MBA from the Kellogg School of Management at Northwestern University. He and his wife, Rosemary, have three children.