Selling a Business – A Guide for Angel Investors and Entrepreneurs
Selling a Business is the Best Part of Being an Investor or Entrepreneur
Keynote speech at the National Angel Capital Organization Summit on October 15, 2009.
This is a practical guide on selling a business, the exit process, the exit team and how to sell for 50% more.
- Angel investing is still quite new – at about the same stage as Venture Capital investing was in the mid 1980s
- The financial world has been changing – dramatically
- Successful investing requires two things – investing in the right companies at the right price and selling the business well
- Exiting well means selling a business at the right price but also in a reasonable amount of time
- The steps to completing a successful exit transaction
- Why it’s important to engage professionals and why the CEO should not lead the exit
- The exit is just another business process – every company needs an exit strategy
- Term sheets create exit alignment and vesting is the most important term
- Who are the buyers for tech companies today?
- Corporate buyers are often the fiercest competitors for traditional Venture Capital
- Today, companies are often acquired just two or three years from start-up
- The most important criteria for selecting the M&A Advisor and the M&A Advisors functions
- M&A Advisor fees and why the M&A Advisor should be local
- The benefits of doing a secondary sale before the exit and the exit timeline
- Things to do before contacting the first prospective buyer – clean up the structure, employment agreements
- Financial statements – review or audit, the financial model, tax considerations, the sales collateral
- The sales funnel and ways to maximize the final selling price of the business
- Structural value increase, illuminating strategic value, capitalizing on inefficient markets
- Why you always need multiple bidders and the importance of the selling skill of the M&A Advisor
- Reps and warranties, the closing process, entrepreneurial recycling and other resources about selling businesses
Many of these lessons are described in my new book on selling businesses for entrepreneurs and angel investors – www.Early-Exits.com.