How Not to Sell a Business Part 2

BY Basil Peters

Things I Learned Not to Do When You Sell a Business

This is a talk I gave to the Vancouver Chapter of the Entrepreneurs Organization (EO) on February 19, 2009.

Highlights of Part 2:

  • I wish I had done a secondary sale – that would have taken the pressure off – mistake #1.
  • I confess that we had never even discussed an exit strategy – mistake #2.
  • We start to learn about exit strategies at the worst possible time.
  • Our exit strategy was to sell the main company to a large defense contractor.
  • I make the classic error of having the CEO lead the exit – my mistake #3.
  • Three buyers get interested, but one by one, they drop off the list – mistake #4.
  • We pay someone to leak to our major competitor that we ‘are in play’.
  • I learn that every exit needs multiple bidders.
  • Just as things start to go well with the exit, a VC on our board starts a hostile take-over from the inside.
  • I learn why venture capital funds will block exits that would work well for the other shareholders.
  • We didn’t check the alignment on our exit strategy – mistake #5.
  • I slowly realize our VC ‘isn’t playing fair’.
  • I learn why it’s critically important for a CEO to be careful when filling out expense reports.

Part 3 of How Not to Sell a Business is online here.

Many of the lessons I’ve learned are described in my new book on exit strategies for entrepreneurs and angel investors –