Selling Your Startup: Crafting the Perfect Exit, Selling Your Business, and Everything Else Entrepreneurs Need to Know

Length: 288 pages
Edition: 1
Language: English
Publisher: Wiley
Publication Date: 2021-07-27
ISBN-10: 1119797985
ISBN-13: 9781119797982
Sales Rank: #116995 (See Top 100 Books)

Learn how to sell your startup from an acquisition expert

Many entrepreneurs dream of the day their company is acquired and they secure a perfect exit. But information about the process of getting your business acquired usually comes from expensive investment bankers who typically advise late-stage startups.

In Selling Your Startup, serial entrepreneur Alejandro Cremades delivers an accessible guide on how to sell your startup. With first-hand experience as a fully exited entrepreneur, investment banker, and lawyer, Cremades describes the tips and tricks startup founders need to sell their early-stage to growth-stage business.

In this book, you’ll discover:

The role that investment bankers play in the acquisition process, how they add value, and how to break down their fees
Preparing your company for sale, including compiling a pitch book, putting its finances in order, and building a target list of potential acquirers
How to get to a Letter of Intent, perform due diligence, and reach a purchase agreement

Perfect for entrepreneurs of all kinds, Selling Your Startup is a must-have roadmap to the practical realities of company acquisition and contains proven guidance on crafting your perfect exit.

Cover
Table of Contents
Title Page
Copyright
Dedication
Acknowledgments
Forewordby Bhavin Turakhia
1 Seeding What Would Grow into Panthera Advisors
    Accelerated Growth through Acquisitions
    Inbound Interest and a Path Forward
    Choosing My Wingman
    Our M&A Journey
    Launching Panthera Advisors
    My Unwavering Commitment to Entrepreneurs
2 Getting Your Company Acquired
    M&A Is Harder Than Fundraising
    The Acquisition Process
    Media versus Your Business: What You See in the Press versus Reality
    Acquirer Expectations
    Why Most Acquisitions Fail
3 The Role of Investment Bankers
    What Is an Investment Banker?
    Good Cop, Bad Cop
    Why Bankers Add Value
    Getting the Right Advice
    Breaking Down the Fees
4 How to Plan Ahead
    Consider the Reasons Why You Want to Sell
    Tying Up Loose Ends
    The Importance of Making Yourself Expendable
    How to Make Yourself Expendable
5 Preparing the Company's Pitchbook
    Packaging the Message
    What Makes Your Company Unique?
    Nailing the Value Proposition for Potential Acquirers
    Defining Transition Plans for Potential Buyers
    Crafting the Marketing Plan
    Identifying a Powerful Flow and Structure
    Acquisition Memorandum Template
    Notes
6 Putting Your Finances in Order
    Understanding Financials
    The Importance of Key Metrics
    Why Growth and Operating Assumptions Are Critical
    Modeling Out a Powerful Five-Year Projection
    Anticipating Questions on Numbers
7 Understanding Your Valuation
    Variables Affecting Your Startup's Value
    Common Methods of Business Valuation
    How to Value Pre-revenue Startups
    How to Increase Your Valuation Faster
    Valuation versus Terms
    Why You Never Want to Disclose Your Valuation
    Avoiding High Valuations with No Rationale
8 Building the Target List
    The Importance of Building the Target List
    Ways to Identify Potential Buyers
    Vetting Buyers for the Right Fit
    Using Partnerships to Trigger Acquisitions
    How to Make Contact with Interested Parties
9 The Communication Process with Buyers
    Liabilities and Responsibilities
    How to Handle Communications
    Gauging Initial Interest
    Nailing the Follow-Up
    Finding the Decision-Maker
10 Preparing for a Successful First Meeting
    Finding Out the Strategic Road Map of the Buyer
    Agreeing On the Meeting Location
    Setting Up the Agenda for the Meeting
    Follow Up with Emails to Keep Them Warm
    Understanding How to Address Concerns
    Questions Potential Acquirers May Ask You
11 Getting to a Letter of Intent (LOI)
    Why an LOI Is So Important
    Breaking Down the LOI
    Comparing Valuations
    Measuring Suitability of the Potential Buyer
    Hostile versus Friendly Buyers
    Considerations before Signing
    The LOI Template
12 Communication with Stakeholders
    The Role of the Board of Directors
    Keeping Investors Updated in the M&A Process
    The Dos and Don'ts with Employees
    Note
13 Negotiating the Price Tag
    Price versus Terms
    Communicating Outcomes
    Pushing for a Deadline
    Increasing Price with a Bidding War
    Maximizing Value on the Buyer and Seller Sides
    Thinking Like a Buyer
14 The Due Diligence Stage
    Putting Together the Deal Room
    Validating Your Claims
    The Dos and Don'ts During Meetings
    Managing the Flow of Information
    What to Look for in the Potential Buyer
15 The Purchase Agreement
    How to Review the Purchase Agreement
    Terms and Clauses to Watch
    Typical Purchase Agreement Outline
    Lawyers and the Purchase Agreement
    Choosing the Right M&A Lawyer
    Dealing with Legal Counsel
16 Strategic versus Financial Acquisitions
    Different Types of Acquisitions
    Reasons for Strategic Acquisitions
    How to Know What Drives the Buyer's Motivation
    Why Revenues Take a Back Seat on Strategic Deals
17 Ways to Kill a Deal
    Not Respecting the Buyer
    Making Changes and New Demands
    Lack of Commitment from the Team
    How You Communicate with Employees and Customers
    Withholding Information
    Note
18 Legal Considerations
    Regulations and Regulators
    Due Diligence and Assumed Liability
    Intellectual Property
    Working Capital
    Escrows
    Contracts
    Warranties and Indemnifications
    Stockholder Approval
    Noncompete and Non-solicitation Agreements
    Stock versus Asset Sales
    Buying Companies That Are Not Incorporated
    Liens and Encumbrances
    Note
19 Closing the Deal
    The Anatomy of an M&A Deal Closing
    Closing Preparations
    Closing Times and Locations
    Speed to Closing
    Accounting and Taxes
    Closing Checklist
    Wrapping Things Up
20 Transitioning to a New Phase
    Vesting and Revesting
    Post-acquisition Integration
    Looking Forward
    Notes
21 The Emotional Roller Coaster during Acquisitions
    Anxiety
    Understanding the Process
    Depression
    Acceptance
    Happiness
Glossary
About the Author
Index
End User License Agreement