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Thank you for the advice. I've witnessed the business growing up on its own because the products are far superior to all others on the market. It's one of those

by kniva 7y ago

Thank you for the advice. I've witnessed the business growing up on its own because the products are far superior to all others on the market. It's one of those things that happened unexpectedly, and I jumped in when things were on the up already. I want to see the business thriving and wouldn't consider a buyout for less than a million because that would be foolish. I do, however, need a new direction to accelerate our growth.

davismwfl 7y ago
You're welcome. Personally, I used a couple of people that approached me as validation I was on the right track. I spoke with them about the market and discussed basic terms and ideas but I never intended to sell or partner with them (but wasn't against it either), I just wanted to get a read on the situation and to practice and learn. You might want to try the same, keep an open mind but use it more as a learning opportunity to see. Who knows too, maybe they surprise you. Just keep an eye out for red flags. For example, I have seen founders fall for it (and I almost did too), where you get a verbal or even a LOI for some large amount, pending due diligence of course. But in reality they are intentionally overshooting it just to get you into due diligence so they can learn what they can and then either they back out and site some deficiency in the due diligence or they low ball and say they'll only close at 25% or some crazy low number based on their findings. This is why if they are quite a bit larger there has to be a breakup fee, something reasonable to cover your expenses, the extra time & money you are spending on accountants, legal etc. Plus it should be just expensive enough that it makes them want to complete the deal at a fair price. Besides going through this process myself a couple of times, I've also been hired by acquiring firms to perform the due diligence on smaller companies so that has given me some awesome insight that I wish I would've had before. No matter what you do, good luck and I wish you the best!

by kniva 7y ago

davismwfl 7y ago

You're welcome. Personally, I used a couple of people that approached me as validation I was on the right track. I spoke with them about the market and discussed basic terms and ideas but I never intended to sell or partner with them (but wasn't against it either), I just wanted to get a read on the situation and to practice and learn. You might want to try the same, keep an open mind but use it more as a learning opportunity to see. Who knows too, maybe they surprise you. Just keep an eye out for red flags. For example, I have seen founders fall for it (and I almost did too), where you get a verbal or even a LOI for some large amount, pending due diligence of course. But in reality they are intentionally overshooting it just to get you into due diligence so they can learn what they can and then either they back out and site some deficiency in the due diligence or they low ball and say they'll only close at 25% or some crazy low number based on their findings. This is why if they are quite a bit larger there has to be a breakup fee, something reasonable to cover your expenses, the extra time & money you are spending on accountants, legal etc. Plus it should be just expensive enough that it makes them want to complete the deal at a fair price. Besides going through this process myself a couple of times, I've also been hired by acquiring firms to perform the due diligence on smaller companies so that has given me some awesome insight that I wish I would've had before. No matter what you do, good luck and I wish you the best!