How Not to Sell a Business Part 4

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 4:

  • This is the story of the Parasun Exit – where we did everything perfectly.
  • A pre-requisite to my investment in Parasun was that a fellow board member and I would execute the exit.
  • We developed alignment on a simple exit strategy at an offsite planning retreat.
  • At Parasun we successfully executed two secondary sales – which took off the selling pressure.
  • The secondary sales were successful because the company had a clear exit strategy and it was priced fairly.
  • We cleaned up the structure and prepared the due diligence materials well in advance.
  • The CEO and management team consistently over delivered on the numbers.
  • We contacted about 100 companies, got about 18 interested and narrowed it to a short list of three.
  • Why three is the optimum number on the short list.
  • The active bidding process moved the selling price up several million dollars in the last few months.
  • Parasun’s exit completed right on schedule, but the price was 48% higher than the target.
  • A comparison on the Nexus and Parasun exits – what to do and what not to do in your exits.

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

If you enjoyed this video, you might also like this one on Exit Strategies for Entrepreneurs and Angel Investors.