We sold our 8-year-old startup last year, and boy do a lot of these bullet points ring true. We were very lucky that one of the founders was skilled at the M&A game, or we would have underpriced it dramatically.
If you’re thinking about selling, I’d recommend hiring an advisor firm. They charge a 2-8% fee, but they are worth it. You get better valuations and help with the tricky clauses.
The one about losing leverage after term sheet, it depends. Our acquirer was a public company, so they had to announce the signing to the market. It would look really bad if the acquisition didn’t go through (stock jumped when TS was announced), so I’d say we had even more leverage then.
If you’re thinking about selling, I’d recommend hiring an advisor firm. They charge a 2-8% fee, but they are worth it. You get better valuations and help with the tricky clauses.
The one about losing leverage after term sheet, it depends. Our acquirer was a public company, so they had to announce the signing to the market. It would look really bad if the acquisition didn’t go through (stock jumped when TS was announced), so I’d say we had even more leverage then.
Edit: typo