What I learned selling my company
harryglaser.com
What I learned selling my company
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Re: What I learned selling my company
#2Work in M&A. Have been involved in 500+ M&A deals and also sold a company. These are very good insights!
Re: What I learned selling my company
#3Can anyone explain the statement "most M&A fails"? In what way?
Edit: Nvm, I found some sources for this claim.
Re: What I learned selling my company
#4Can anyone explain the statement "most M&A fails"? In what way? Edit: Nvm, I found some sources for this claim.
In many ways. Like adjusting to the new company's culture. In staying the relevant length to exercise options. In producing at a similar caliber prior to acquisition. The list goes on and on.
Re: What I learned selling my company
#5Can anyone explain the statement "most M&A fails"? In what way? Edit: Nvm, I found some sources for this claim.
It is there in the paragraph: failed integration, a ton of employee churn, and/or a series of missed targets.
Re: What I learned selling my company
#6> M&A is one of two ways a pot of gold happens.
I don't know what the second one he has in mind is; the some of the ones I know are:
1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich).
2 - sell part of your company to the public (IPO)
3 - sell the whole company (M&A)
4 - spin out or sell off a division (a kind of M&A)
One major disadvantage of 2-4 is that other people tend to hear about it.
Re: What I learned selling my company
#7Re: What I learned selling my company
#8> M&A is one of two ways a pot of gold happens. I don't know what the second one he has in mind is; the some of the ones I know are: 1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich). 2 - sell part of your company to the public (IPO) 3 - sell the whole company (M&A) 4 - spin out or sell off a d…
> One major disadvantage of 2-4 is that other people tend to hear about it
I don’t doubt this, but I’m curious: why do you see the publicity as a disadvantage?
Re: What I learned selling my company
#9> I was advised that 50% of signed LOIs actually close. I bet it’s less. You will see the LOI and dream of trading stress for riches. Remember: Less than 50% chance of closing.
100%
Which is why I hate that exclusivity is industry standard.
It feels exploitative that acquirers can demand exclusivity in a deal when the chances of it closing are less than 80%.
Imagine selling a house and taking it off the market because you got an offer with a 50% chance of actually closing 3 months later.
Even worse, most acquirers will say “nope” if you ask them to cover your legal fees if they back out of the deal.
This happens because sellers of companies only sell 1 or 2 companies in their lifetime, while buyers of companies typically do dozens and dozens of transactions. There’s an extreme power imbalance in favor of acquirers. Most sellers learn these lessons the hard way.
Re: What I learned selling my company
#10> M&A is one of two ways a pot of gold happens. I don't know what the second one he has in mind is; the some of the ones I know are: 1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich). 2 - sell part of your company to the public (IPO) 3 - sell the whole company (M&A) 4 - spin out or sell off a d…
The second one the author had in mind is almost certainly IPO.
Your (1) isn't a pot of gold in the colloquial sense of "suddenly finding a life-changing amount of money". Running a profitable business is ideal, especially in a post-ZIRP world, but it almost never culminates in a single "all my hard work has paid off, I can take it easy now" moment like IPO or acquisition.