Flagstone’s software helps brokers gather information and evaluate businesses quickly and efficiently. At the same time, it saves owners both time and effort. The software does all this by collecting data directly from the business’s QuickBooks and bank accounts. With just a few clicks, the broker can obtain necessary information and the data can easily be updated. Then Flagstone can process the numbers needed for the listing while identifying any issues that might cause problems with buyers, allowing those to be fixed in good time. 

Yes, you are free to charge clients for the use of Flagstone’s software and any services that you provide around it. If it would be helpful for you, the Flagstone team would be happy to assist with setting up billing for your clients.

Many owners are comfortable sharing their data. Flagstone’s software offers a secure, efficient way for owners to provide data that will be required for a sale. Flagstone is a secure intermediary that allows owners to share data without giving brokers direct access to the underlying systems.

Flagstone connects to the QuickBooks public interface (API). QuickBooks allows authorized users to delegate access to Flagstone as an allowed application. The owner or their chosen representative will select the option to connect QuickBooks, then follow the steps to authorize the connection in just a few clicks. Flagstone never has access to the user’s credentials. The business can revoke Flagstone’s access at any time via the QuickBooks app settings. 

Flagstone uses a software company called Plaid to collect data securely. Plaid is a large company that is trusted by many large financial institutions. The owner selects their bank, signs in and then authorizes Plaid to download data from their account. Flagstone never has access to the owner’s login credentials. Flagstone can only receive data. The end result is as if the owner had sent pdfs of their bank statements. However, using Plaid is much faster and allows us to keep the data up to date. 

Yes, the owner’s data is secure and kept confidential. Flagstone uses industry standard security to protect the owner’s information. Our platform has been assessed by a penetration testing firm, who found no issues with our security. Our platform also meets the criteria established for receiving data, via Plaid, from the largest US banks. The owner is able to revoke access to their data at any time, including asking Flagstone to remove access for their broker. 

The provision of sell-side financial due-diligence is a well established practice in the mid-market to help accelerate deals and attract higher quality bids. Now Flagstone is making sell-side diligence accessible for SMB sellers and their brokers. 

Sell-side due diligence differentiates listings and makes them more attractive to buyers. If an owner includes sell-side diligence in a data room, this can increase the buyer’s confidence in the listing. Buyers may be more likely to bid and may bid at higher prices. Sharing sell-side diligence, as well as the raw data underlying it, can help accelerate due diligence.

Sell-side due diligence can also help business brokers identify issues that may eventually become barriers to completing a sale. Finding these issues early can help brokers either resolve them or avoid spending months on deals that fail to close. 

It is the role of the broker to guide clients towards a successful sale. Most SMB sellers are unaware of the potential benefits of providing sell-side diligence analyses with their listings and data room. 

Many leading brokers feel it is important to know the business that they are selling. They invest time to validate the owner’s financials before publishing them in a CIM. Flagstone’s software just automates and extends such analyses. 

Ultimately, it is the owner’s decision as to what documents and information are included in a listing and a data room. However, it is the role of the broker to advise them on those decisions.

Flagstone’s Terms of Service specify that the business owner both requests the use of their data to create the analyses and then has ownership of the results. It is the owner’s decision to allow their broker and any prospective buyers to have access to their data and their results. If Flagstone’s software is being used by the owner to share access to their data and / or their results, the owner may revoke access at any time. 

It is the owner’s decision whether to share their data and / or their results with prospective buyers. Flagstone places no restrictions on with whom the owner may share their data and / or results. 

Brokers should seek their own legal counsel on this matter. Flagstone’s perspective is that the owner requests that Flagstone run analysis, the owner owns the results and the owner makes all decisions as to with whom those results are shared. As such, the sharing of the results with a prospective buyer may be done on a similar basis to the sharing of any other information on the owner’s business. 

We utilize a data set that contains the details of thousands of business sales. For each of those, we calculate the price to earnings multiple. We then perform a statistical analysis to identify the range of multiples that a given business typically achieves. 

We have found that the most important variables are discretionary earnings (higher earnings is correlated with higher multiples) and the industry in which your business operates (can lead to either higher or lower multiples than an average small business). 

Flagstone’s range of multiples assumes an offer from a prospective owner-operator purchasing 100% of a company and using an SBA 7a loan to finance the majority of their purchase. Other types of buyers and deal structures may lead to different ranges of multiples, which may be either higher or lower than those shown. 

We may be able to receive data either as a CSV/spreadsheet download from the bank or as a PDF of bank statements. Please contact us to discuss these options.