The following article was written for TheDeal.com by Sarah Pringle, 12/15/2015:
A company exploring its strategic options tends to hire an investment bank to advise on such a process, but for an Entrepreneur such as John Carter, a non-traditional, relationship-based approach is more appealing.
It was in late September that the company that Carter founded and now runs as CEO, Cheshire, Conn-based Wayback Burgers, announced it had retained Oxford Entrepreneurs to serve as its exclusive adviser for its anticipated initial public offering or an alternative transaction.
Wayback, a 100%-franchised chain of burger and milkshake joints that had previously been known as Jake’s Hamburgers, chose the Atlanta-based education and commerce platform for Entrepreneurs, led by CEO and founder Cliff Oxford, even after being courted by well-known investment banks.
“It really comes down to the relationship,” Carter said in a phone interview, “[Cliff Oxford’s] accessible, knowledgeable, and he understands this Entrepreneurial way of looking at things.”
Oxford Entrepreneurs was established by Oxford in 2004 to help Entrepreneurs navigate the hurdles of growing beyond a successful startup and creating a platform to exit, helping with issues such as “how to deal with the brilliant jerk” and “how to structure an earn-out so you will not get burned or get half of your company stolen,” as Oxford himself puts it in a phone conversation. Oxford Entrepreneurs has compiled an exit platform that outlines a set of rules for Entrepreneurs on such things as term sheet time limits.
Originally part of Emory University, the center now operates independently from the school and encompasses more than 350 high-growth Entrepreneurial member businesses.
Carter was among the group of Entrepreneurs that attended one of Oxford Entrepreneurss monthly roundtables for the 100 fastest-growing companies and subsequently became a member in the organization. As such, Oxford Entrepreneurs assisted Wayback in investing in infrastructure and human capital, and later executed a strategy study looking at exit options beyond a sale that would help chain to ultimately achieve 1,000 locations, Oxford said.
“My role has gotten to be less of educator and more of an adviser through the exit,” Oxford said of Oxford Entrepreneurss member companies.
Besides Wayback, other Oxford Entrepreneurs member companies to keep an eye on include Jimmy Beans Wool, an online yarn and fabric retailer, and Vanderbloemen Search Group, a staffing firm for churches, ministries and faith-based organizations, he said.
‘These are Entrepreneurs that are making new markets,” Oxford said, noting that these companies are at a “pivotal point’ within their lifecycles.
The most common exit path Oxford had helped businesses with had been sales, but he said the landscape abruptly changed following regulation changes applying to IPOs.
In March, the Securities and Exchange Commission approved the Regulation A+ provision in connection with the implementation of Title IV of the JOBS Act. The new regulation effectively permits small businesses and startups to hold what is called a “mini IPO” by raising up to $50 million from the general public, and not only accredited investors.
‘We advised against [going public] until the new rules regarding the mini-IPO,” Oxford said, explaining that it is now a viable alternative to an exit.
Indeed, Oxford Entrepreneurs advised Wayback Burgers to consider a mini-IPO, even though Oxford himself acknowledged that the recommendation would likely lure competition from the investment community to advise on an IPO process.
After all, Wayback Burgers is on the move. A rival of Shake Shack Inc. (SHAK) in the better-burger franchise category, the company began in 1991 in Newark, Del., and has grown to include outlets in Major League Baseball stadiums, Wal-Mart Stores Inc. locations, and naval bases across 22 states. The burger concept is expected to surpass 125 locations by the end of 2015, with 350 outlets in development in 32 countries.
“Of course, Wall street came calling,” Oxford said. “Our advice to [Wayback] was to go and see what our competitors had to offer. I will admit I took some deep breaths when they had visits planned all over [New York], but I also knew they had really taken the time not only to do due diligence on our exits but also had taken the resources to invest in themselves with the center.”
Despite being courted by more traditional investment banks. Wayback’s Carter explained that working with Oxford Entrepreneurs has allowed it to run a more open and exploratory process that isn’t unidimensional or “unidirectional.”
In fact, since the September announcement to explore an IPO. Wayback has been approached by strategics and private equity firms about potential partnerships or transactions, both men said.
But for now at least, Oxford said he still anticipates a mini-IPO as the most likely outcome.