Question: I liked your article on VentureBeat a couple of weeks ago about what to watch-out for as a buyer of a business. What about if I’m a seller? I’m the founder of a web-based music business, and I’m ready to sell and move onto my next venture. Any advice would be appreciated.
Answer: Thanks! Here are five quick tips in connection with selling a venture:
Be Careful with Private Equity Buyers. Private equity firms are in the business of buying and selling companies. Accordingly, they are extremely sophisticated and savvy and are often represented by large, aggressive law firms. Deals with private equity buyers are generally more complex than those done with strategic buyers due to, among other things, the level(s) of debt added to the target and/or financial engineering.
Moreover, unlike most strategic buyers, private equity buyers usually require the selling entrepreneur to rollover part of his/her equity into the acquirer (or, in other words, to maintain skin in the game) and may include a financing condition in the acquisition agreement – which in today’s choppy debt markets adds a level of uncertainty to closure.
To read the full, original article click on this link: Ask the attorney – 5 tips on selling your business | VentureBeat
Author: Scott Edward Walker
