

How to Sell your Company - ZeroMinx
http://jacquesmattheij.com/How+To+Sell+Your+Company

======
sivers
I never thought I would sell, but I got three offers in one week. I told them
all no. But after thinking about it a while, I told them all yes.

Thing is, Amazon was not one of the three. And I always thought that Amazon
would be the perfect daddy for my baby.

So after the first three companies were looking at my books with NDAs and
LOIs, I asked a connected friend to introduce me to someone at Amazon, and
told him why. I was surprised how quickly someone at Amazon got back to me,
and they were a contender until the end. (I chose a different company - one of
those first three, after all.)

It makes all the difference in the world to have multiple interested buyers.

Any time you hit a snag in negotiations, you really have to be 100% sincerely
ready to walk away. Actually believe, to the core, that until the final
signature and wire transfer goes through, the deal might not happen, and
you're OK with that.

~~~
dralison
"Any time you hit a snag in negotiations, you really have to be 100% sincerely
ready to walk away..."

Wish I could upvote that more. When we sold our company my partner was ready
to take nearly any offer but fortunately for me I held a 51% stake and was
able to adopt that mindset. Two months into acquisition discussions I got up
from the virtual table and said "This won't work. Sorry."

The acquirer resumed discussions later that day and we were able to hit the
target we had for the deal. Managing that kind of stress is incredibly hard.

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tchock23
This is one of the best articles on selling a company I've come across, and
I've read my fair share of them... I recently had a negotiation that went to a
few days before closing and we stepped away. I've since been through various
up and down periods of regret for stepping away, followed by relief. It's a
nightmare, and I think Jacques accurately captured what to consider in this
article (I wish I had this available before!).

I would be really interested to read articles around market timing of
acquisitions if anyone on HN has come across something as good as this post by
Jacques. I've found a few articles here and there, but mostly written by M&A
guys who are pushing to have more deals to broker.

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rexf
Very long, but very worthwhile read. It's about how common sense isn't common
sense. Assume the worst will happen, always be ready to walk away, and only a
final signed contract with money in your bank means anything.

One specific thing I learned from reading this:

> Typically value that is there today should be reflected in the 'cash'
> portion and value that is still to be built in the 'stock' portion.

This makes sense because you are getting paid in cash for the value at the
time of selling your company. Whereas the stock is contingent on future
performance and not a 100% sure thing.

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bconway
_If it was to stop working for a big company and to chart your own path, think
about whether or not selling to a large company with a mandatory employment
period (with serious consequences in case you break that contract) is for you
at all._

Could someone give an example of a mandatory employment period with "serious
consequences"? Most discussions I've had with people who have left early from
a post-acquisition environment centered around forgoing their stock vesting or
retention bonuses (to them, it was worth the loss). Assuming no one's breaking
non-competes or NDAs, I'd be curious to hear what else is under consideration.

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bencollins
Does anyone have any insight into what point (size/complication of the deal)
you transition from getting representation from a lawyer versus lawyer +
investment bank. I could imagine a good M&A lawyer would be enough
representation to navigate a less complicated deal but when is an investment
bank necessary?

------
duck
_with the thread now deleted (for good reasons, which is why I'm not linking
to it here)_

<http://news.ycombinator.com/item?id=2154106>

Why was it deleted?

~~~
petervandijck
Because the people who were buying the company might also have been reading
that thread.

~~~
RiderOfGiraffes
... and that's potentially a good reason not to post the link again here at
the moment. You (by which I mean user duck) might consider redacting it.
Please.

~~~
cma
And screw over the acquirers? Clannish mentality...

~~~
gommm
It's not a question of screwing over the acquirers, it's just that in that
case the acquirer had much more experience and could easily use the
information they could get from the discussion to their advantage

------
barmstrong
Great post.

One question I had is whether it _ever_ makes sense to agree to a "no
shopping" clause in a letter of intent. This seems to be a big disadvantage
because if company A you're dealing with passes or plays hardball, then
companies B and C you were previously talking to will assume they passed for a
good reason. Is there any reason you can't have multiple parties still
competing during a period of due diligence?

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rexreed
Good article - I noticed that my comments from HN were quoted a few times in
there... might have been good to put a bit of attribution, or at least
highlight them so it's obvious they are HN quotes. Some parts show the quote
marks, but others don't. Specifically the two deals mentioned (the lowball and
the bait-and-switch at closing) were ones I posted about in the original HN
post.

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tjmaxal
Anyone else note the different mentalities between seeking more capital and
outright selling the company?

