M&A Sellers: How to Feel Less Exposed by the Process
Going through an M&A sales process in general, and writing an offering document specifically, can leave Seller feeling extremely exposed. If you’re a Seller or potential Seller, you aren’t alone! And if you’re on the buying side, sensitize yourself to the worries and fears of Sellers.
Sellers feel vulnerable because every decision they’ve made throughout their careers — good, bad, and everything in between — is fodder for discussion. Every problem, every wart, and every misstep that Sellers would rather forget get rehashed and brought to light. Sellers often have to explain and discuss embarrassing decisions and poor investments. It’s the ultimate mea culpa for many business owners.
But Sellers can comfort themselves with the fact that they aren’t the only ones to go through this process. Buyers are like doctors: They’ve seen it all or will at least pretend like they have.
Sellers afford themselves some level of safety by remembering the following tips:
Hire a capable intermediary: An intermediary often acts as hand-holder for the business owner and serves as a valuable buffer. An intermediary can make the initial overtures without tipping off the fact that a certain company is for sale until a confidentiality agreement is in place, whereas the mere act of a Seller approaching the Buyer sets off the alarms.
Keep your cards close to your vest. Sellers can protect themselves through the slow, gradual release of information. Each divulgence has its time and a place.
Assume the position: At some point, Sellers have to just get over their shyness and prepare themselves to feel as if they’re being paraded naked through town, poked and prodded, and generally abased and abused. It isn’t pretty, but it’s what happens!
Buyers, be cognizant of these feelings, too. Be gentle! Buyers should only ask for documents and information needed to close the deal.