3 ms·
I would first set a sell price and ask a 15% diposit before due diligence. If due diligence fails, you keep the diposit, if DD succeeds, you get the remaining
by antaviana 8y ago
I would first set a sell price and ask a 15% diposit before due diligence. If due diligence fails, you keep the diposit, if DD succeeds, you get the remaining 85%.
This is a good test for good faith and allows you to offset bad faith.
- kylecordes 8y agoThis is good advice. Even if things aren't along far enough to even talk about a sell price, choose some portion of money that you think of as a small slice of that likely sell price, and ask for it as a deposit... before diligence. There's a chance that this will drive away a potential acquirer, who may indicate that they are horribly offended by such a request. That is a good thing. A company offended by the request to put down a slice of the money up front (before they get to see all your private details in diligence!), is likely either just shopping for information, o to be a big pain later in the process. A company who haggles about the deposit but agrees to pay something, likely is a serious buyer with whom you can reach a mutually agreeable outcome.
- koverda 8y agoIs this a common practice?
- nopzor 8y agoIt’s not common but isn’t completely unusual. It can be structured in different ways but is often referred to as a “breakup fee”. My sense is it’s much more common on larger deals than smaller ones, though.