Preparing for the sale

In the initial stages of the sale of a company, the approach taken by the bankers is often quite different to that of the owners. From the point of view of the bankers, the first step is to prepare the necessary documentation (prospectuses, announcement «teaser», etc.). Without this, according to the bankers, it is impossible to initiate a conversation with a potential buyer. It is easy to understand why bankers take this position, as the preparation of these documents allows them to charge additional fees. In fact, except when explicitly required by law, the preparation of excessive investment prospectuses is often a waste of time and money. In reality, the final price and terms of the sale are almost independent of the quality of these “promotional” materials. The argument that potential buyers consider this information in only a certain format is fantasy that well serves bankers interests. In the initial phase, the main responsibility of the banker is to gauge interest from potential buyers to begin negotiations to purchase the company. To do this, it is not necessary to prepare a detailed investment prospectus. It is enough to check if the company is able to pass due diligence and prepare a simple one-page announcement (teaser).

During their search for potential buyers, bankers spend most of their time on the search for the specific decision-makers within corporations authorized to negotiate purchases, and not on the preparation of marginally-useful documentation.

For the owners of the company, the main issue at this stage is to determine the possible sale of the company, the price and the terms, and not the preparation of these “magic” documents. The price and terms depend directly on the availability of relevant and solvent buyer(s). It is worth remembering that the most valuable resource any seller can have at negotiations is the presence of several potential buyers.

The Teaser

An example of the teaser can be downloaded from our database (download the sample teaser here). The document should be short (no more than one page), and contain a minimum number of colorful pictures.

A detailed version of our recommendations for preparing the teaser can be purchased and downloaded in our store.

Emailing the Teaser

If you are planning on engaging the sale of your company and the distribution of the teaser with an email address such as @yahoo.com, @hotmail.com or other free accounts, be advised that it is likely that your message will not reach your recipients. Messages from these type of accounts are often filtered out by corporate spam filters.

From the very beginning, be sure that all contact with potential buyers is carefully documented. In the event that the owner of the company decides to change bankers/consultants, this database should be transferred to the client.

If you have any questions or would like to discuss your specific case in further detail, please call us at +12024137187 or contact us .