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Learn how to sell your startup from an acquisition expert 

Many entrepreneurs dream of the day their company is acquired and they secure a perfect exit. But information about the process of getting your business acquired usually comes from expensive investment bankers who typically advise late-stage startups. 

In Selling Your Startup, serial entrepreneur Alejandro Cremades delivers an accessible guide on how to sell your startup. With first-hand experience as a fully exited entrepreneur, investment banker, and lawyer, Cremades describes the tips and tricks startup founders need to sell their early-stage to growth-stage business. 

In this book, you’ll discover: 

  • The role that investment bankers play in the acquisition process, how they add value, and how to break down their fees 
  • Preparing your company for sale, including compiling a pitch book, putting its finances in order, and building a target list of potential acquirers 
  • How to get to a Letter of Intent, perform due diligence, and reach a purchase agreement 

Perfect for entrepreneurs of all kinds, Selling Your Startup is a must-have roadmap to the practical realities of company acquisition and contains proven guidance on crafting your perfect exit.  

 

 

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Acknowledgments
  6. Foreword
  7. 1 Seeding What Would Grow into Panthera Advisors
    1. Accelerated Growth through Acquisitions
    2. Inbound Interest and a Path Forward
    3. Choosing My Wingman
    4. Our M&A Journey
    5. Launching Panthera Advisors
    6. My Unwavering Commitment to Entrepreneurs
  8. 2 Getting Your Company Acquired
    1. M&A Is Harder Than Fundraising
    2. The Acquisition Process
    3. Media versus Your Business: What You See in the Press versus Reality
    4. Acquirer Expectations
    5. Why Most Acquisitions Fail
  9. 3 The Role of Investment Bankers
    1. What Is an Investment Banker?
    2. Good Cop, Bad Cop
    3. Why Bankers Add Value
    4. Getting the Right Advice
    5. Breaking Down the Fees
  10. 4 How to Plan Ahead
    1. Consider the Reasons Why You Want to Sell
    2. Tying Up Loose Ends
    3. The Importance of Making Yourself Expendable
    4. How to Make Yourself Expendable
  11. 5 Preparing the Company's Pitchbook
    1. Packaging the Message
    2. What Makes Your Company Unique?
    3. Nailing the Value Proposition for Potential Acquirers
    4. Defining Transition Plans for Potential Buyers
    5. Crafting the Marketing Plan
    6. Identifying a Powerful Flow and Structure
    7. Acquisition Memorandum Template
    8. Notes
  12. 6 Putting Your Finances in Order
    1. Understanding Financials
    2. The Importance of Key Metrics
    3. Why Growth and Operating Assumptions Are Critical
    4. Modeling Out a Powerful Five-Year Projection
    5. Anticipating Questions on Numbers
  13. 7 Understanding Your Valuation
    1. Variables Affecting Your Startup's Value
    2. Common Methods of Business Valuation
    3. How to Value Pre-revenue Startups
    4. How to Increase Your Valuation Faster
    5. Valuation versus Terms
    6. Why You Never Want to Disclose Your Valuation
    7. Avoiding High Valuations with No Rationale
  14. 8 Building the Target List
    1. The Importance of Building the Target List
    2. Ways to Identify Potential Buyers
    3. Vetting Buyers for the Right Fit
    4. Using Partnerships to Trigger Acquisitions
    5. How to Make Contact with Interested Parties
  15. 9 The Communication Process with Buyers
    1. Liabilities and Responsibilities
    2. How to Handle Communications
    3. Gauging Initial Interest
    4. Nailing the Follow-Up
    5. Finding the Decision-Maker
  16. 10 Preparing for a Successful First Meeting
    1. Finding Out the Strategic Road Map of the Buyer
    2. Agreeing On the Meeting Location
    3. Setting Up the Agenda for the Meeting
    4. Follow Up with Emails to Keep Them Warm
    5. Understanding How to Address Concerns
    6. Questions Potential Acquirers May Ask You
  17. 11 Getting to a Letter of Intent (LOI)
    1. Why an LOI Is So Important
    2. Breaking Down the LOI
    3. Comparing Valuations
    4. Measuring Suitability of the Potential Buyer
    5. Hostile versus Friendly Buyers
    6. Considerations before Signing
    7. The LOI Template
  18. 12 Communication with Stakeholders
    1. The Role of the Board of Directors
    2. Keeping Investors Updated in the M&A Process
    3. The Dos and Don'ts with Employees
    4. Note
  19. 13 Negotiating the Price Tag
    1. Price versus Terms
    2. Communicating Outcomes
    3. Pushing for a Deadline
    4. Increasing Price with a Bidding War
    5. Maximizing Value on the Buyer and Seller Sides
    6. Thinking Like a Buyer
  20. 14 The Due Diligence Stage
    1. Putting Together the Deal Room
    2. Validating Your Claims
    3. The Dos and Don'ts During Meetings
    4. Managing the Flow of Information
    5. What to Look for in the Potential Buyer
  21. 15 The Purchase Agreement
    1. How to Review the Purchase Agreement
    2. Terms and Clauses to Watch
    3. Typical Purchase Agreement Outline
    4. Lawyers and the Purchase Agreement
    5. Choosing the Right M&A Lawyer
    6. Dealing with Legal Counsel
  22. 16 Strategic versus Financial Acquisitions
    1. Different Types of Acquisitions
    2. Reasons for Strategic Acquisitions
    3. How to Know What Drives the Buyer's Motivation
    4. Why Revenues Take a Back Seat on Strategic Deals
  23. 17 Ways to Kill a Deal
    1. Not Respecting the Buyer
    2. Making Changes and New Demands
    3. Lack of Commitment from the Team
    4. How You Communicate with Employees and Customers
    5. Withholding Information
    6. Note
  24. 18 Legal Considerations
    1. Regulations and Regulators
    2. Due Diligence and Assumed Liability
    3. Intellectual Property
    4. Working Capital
    5. Escrows
    6. Contracts
    7. Warranties and Indemnifications
    8. Stockholder Approval
    9. Noncompete and Non-solicitation Agreements
    10. Stock versus Asset Sales
    11. Buying Companies That Are Not Incorporated
    12. Liens and Encumbrances
    13. Note
  25. 19 Closing the Deal
    1. The Anatomy of an M&A Deal Closing
    2. Closing Preparations
    3. Closing Times and Locations
    4. Speed to Closing
    5. Accounting and Taxes
    6. Closing Checklist
    7. Wrapping Things Up
  26. 20 Transitioning to a New Phase
    1. Vesting and Revesting
    2. Post-acquisition Integration
    3. Looking Forward
    4. Notes
  27. 21 The Emotional Roller Coaster during Acquisitions
    1. Anxiety
    2. Understanding the Process
    3. Depression
    4. Acceptance
    5. Happiness
  28. Glossary
  29. About the Author
  30. Index
  31. End User License Agreement