Most businessmen I know have one of the two Commercial objectives. The objective one is to generate a sustainable and consistent income. Objective two is to get to the exit.
In the first days of the Foundation JacketI can’t lie, I had visions of greatness. I imagined Myelf directing an office with more than 500 employees and a Global Client Base. But as time was used, I realized that the thesis were larger challenges than I wanted.
As it grows as a founder, its role becomes less about doing everything yourself and more about the management of people and processes. As businessmen born, I and my co -founders lost the art of creating and giving life to a new company.
We decided that we had two options. Or we could look at a Additional financing round for our rapid and highly profitable company. Or we could look at a way out.
We opted for the exit route.
This is my trip to leave, counted in five stages, the steps and important considerations in the process if it is Planning of an outputAnd how you can do it.
Internship 1. decision to leave
The first thing you should consider when going through a sales and exit process is whether it is really suitable for you. Once firm and sell, there is no going back.
You will no longer have any control over the company (assuming it is a complete exit) and that is something that must ensure that you are ready. Do not hurry this part. Take time, with your co -founder, your investors, And your tableTo make sure you feel good.
Once you are in the mentality that you are happy to say goodbye to any control or property, it is about guaranteeing that you have clarity about what you may want to do after your departure.
Many founders stagger after leaving. They think they want an exit, but they realize that they can have a lot of money, but they live a purpose or a sense of direction in their life. Have a plan – What are you going to do next?
Internship 2. Looking for a buyer
Once you reach a certain stage or level in your business, searching proactively an exit is not as difficult as I thought it could be.
If you are climbing well, have a seven-digit turnover (or a projection of that in the next 12-24 months), and is well disassembled (3-4+ years), then the Chans are that you can request the support of an M&A advisory firm.
If you are not sure whether they will be interested or not, it is worth approaching to discover which thresholds are for interest and work towards them. These could be income thresholds, Gain thresholdsor product thresholds.
Different M&A advice companies will charge different percentage rates of the sale or the amount of the agreement for their work. That said, the good news is that, in general, if they agree to take it, there is little or no payment in advance or less that they offer a sale.
The firm we used in the market and found a number or good potential buyers, both commercial and industry, which made sacrifices to review and possible with them. Of course, you can try to address possible competitors or buyers With An M&A advice firm, but can be much more difficult.
Internship 3. The sale
Selling a business is hard work. Exhausting work, in fact. The process can take several months, often up to one year or more, from starting to look for a buyer, to sign contracts and complete the process.
Negotiations can take a long time, so it is important that, as a founder, know what is looking for the agreement. Decide some non -negotiable points from the beginning, such as the price, the duration of your stay after sale and the terms of agreement.
These may involve thinking about how the result will be seen for your investors, if you also have any, so keep this into account. Then, once the terms of the agreement are fundamentally agreed, it will go to due diligence.
The due diligence process can take a long time and be very painful but understandable. The buyer is likely to analyze each contract and financial records of the last five years. Which includes employee agreements, equipment structure, Customer relationshipsProduct and technology details.
Once they are happy with this, or in parallel, you can work with your lawyers and buyer’s lawyers to write a SPA (Action purchase agreement). It is more than 100 pages and is full of technical details of the purchase of the company.
Wait back and forth here until the last day of signature! We were still negotiating clauses in our spa until the last day, questioning if the agreement would ever happen.
Stage 4. The output?
You may think that once you have signed the SPA, this is your departure and sometimes it is. But most of the time, there is a deferred payment or a payment of profits that makes you a total amount for the business until you have been used for a certain period of time.
This could be 12 months, two years, three years or possible equally longer. Once again, understandable, the buyer will want a long delivery period in which he stays with the business, and wants to link it to terms or conditions of performance.
Be careful in negotiations here. Once you sell, there will be some things outside your control. Ensuring “winning protections” in the spa is vital.
Step 5. What follows?
Once it comes out, if you take into account the above and the treatment is structured in the way you want, the feeling is really surprising. I do not regret it. It is the life of the leg that changes.
That said, I cannot emphasize enough how much work the sales and exit process can be. It’s exhausting! Negotiations, due diligence, legal, finance; Everything is a great tension and the pressure is activated. I probably worked between 14 and 15 hours in a duration of the week in the sales process, and it was a calm.
But for me, the final stage was always going to start another company. I have already thrown myself, only four weeks after the impact on UrooutinaA new business and a new challenge to create things.
However, some founders have had the opposite experiences and have had the remorse of the vendors, with a deep repentance. Then, don’t hurry. Prepare for a lot of hard work, then do it.
Ed Johnson is the CEO and co -founder of Uurine, a platform for social responsibility, routine and motivation monitoring that will be launched in the spring of 2025. Previously, Pushfar co -founded, a leading software company, which was acquired socially for Finone Betfire. Background in digital marketing and entrepreneurship. Ed also writes, mentor new companies and talk about technology and businesses.
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