Why You Should Consult with an Exit Planner Before Considering a Proposal to Buy Your Business or its Core Assets
As a transactional firm in the technology and health tech space, the firm often gets retained by clients to engage in negotiations regarding the sale of a company or its core IP assets to a third party after the client has been approached by a third party with a purchase offer. In many of these cases, the offer was completely unexpected but the client is adamant that it wants to close the deal. However, when the firm then proceeds to ask the client directly what it is looking to accomplish with the deal, the client is often unable to answer the question beyond merely stating that it wants to accept whatever is on the table. If you are a business owner or entrepreneur in a similar situation, you would be wise as a first step before you ever sit down with the potential buyer and engage in that first conversation to invest the money in a professional valuation in order to get a clear understanding of what your business or assets to be included in a proposed sale might actually be worth on the open market. If you are hesitant to spend money on such a valuation, consider this: would you buy a house in California, for example, where houses are quite expensive, without having a clear idea of what the house is worth? Maybe in a market where houses are only worth $100k that would not give you pause for consideration, but when you are talking about paying out a few million dollars on what would be considered a "starter" home in another state: would you really do that without knowing the value of the house you were buying on the open market? As a second step, you would be wise to consult a professional business exit planner on all the issues surrounding exiting your business. This article by a professional exit planner gives an excellent perspective on the value that an exit planner can bring to the table before you start engaging in negotiations with a prospective buyer:
Can The Investment Capital You Have Support The Post-Exit Lifestyle You Want?
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