How to Sell your Company

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.<p>Thing is, Amazon was not one of the three. And I always thought that Amazon would be the perfect daddy for my baby.<p>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.)<p>It makes all the difference in the world to have multiple interested buyers.<p>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.

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!).<p>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&#38;A guys who are pushing to have more deals to broker.

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.<p>One specific thing I learned from reading this:<p>&#62; 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.<p>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.

<i>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.</i><p>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.

<i>with the thread now deleted (for good reasons, which is why I'm not linking to it here)</i><p><a href="http://news.ycombinator.com/item?id=2154106" rel="nofollow">http://news.ycombinator.com/item?id=2154106</a><p>Why was it deleted?

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&#38;A lawyer would be enough representation to navigate a less complicated deal but when is an investment bank necessary?

Great post.<p>One question I had is whether it <i>ever</i> 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?

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.

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