Acquire.com Webinar - Navigating Deal Complexities When Selling in 2024

Foreign. Let's go ahead and kick this off. I'm super excited. I hope you all had a wonderful holiday season. And now it's time to talk about acquisition negotiations. And as I go through this, if you have any questions, feel free to put them in the chat and we'll do a Q and A session at the end. So without further ado, I will go ahead and share my screen. Let me know if you can see this. Are we all good? All right. We are good. All right, so today we're going to be talking about how to negotiate with buyers to maximize your exit. And for those of you that don't know me, my name is Andrew Gazdecki. I am the CEO and founder of acquire.com in previous life I had started two different businesses. One a SaaS business and one a crypto protocol businesses, both acquired. So I've, I've been on the fence in terms of selling to a financial buyer, private equity firm, and then also selling to a strategic buyer. And that actually is what led me to start productom to help others just like myself achieve a life changing outcome. So to dive into that a little bit more, just quick introductions on who you are, what we do, why we do it. So who we are. Acquire.com we're the world's most founder friendly acquisition marketplace around. And then what we do, we help thousands of founders get acquired through tech and advisory. And the reason we do this is to frankly change people's lives and really enable a new generation of founders. And so what we've been doing at acquire.com is we've started a webinar series where we've gone through three webinars so far. So if you haven't seen any of these webinars, go to blog.acquire.com and you can go through these. But the first one we did was just going over the entire acquisition process, like how does it work, what's legal, what's due diligence, just kind of the basics. But we went pretty in depth in that. So definitely check out that one. Then the second webinar we did was how to value your business, how to set your asking price, what multiples are we seeing? How important is it to get that correct? Definitely check out that webinar if you haven't. And then the third one was how to properly prepare for an acquisition. So this is before you go live with an acquisition and today we're going to be talking about how to negotiate with buyers. So this is assuming that you understand the acquisition process you've properly valued your business and you properly prepared yourself for an acquisition. Now, now it's time to speak with buyers. And you know, how do you navigate the complexity of those negotiations to help you maximize your exit? So what you going to learn today? Hopefully how to make a first great impression. Because it, it matters. You can only get, you get one first impression. And so making that great is absolutely critical. And also what buyers expect of you and your listing on acquire.com how to vet buyers, how to know if they're serious, legit, can they even close acquisition? Do they know what they're talking about? We'll go through that. And then also how to negotiate using creative deal structures. Not all deal structures are created equally. And so I'm going to be going over, you know, the good parts, other common parts that we see, and really how you can negotiate to get a win win deal for your acquisition. And then also what happens if things go wrong? Not all acquisitions go through. Just because you built a business doesn't mean you're guaranteed to sell it. But if you follow all these tips, it'll just increase your chances of successfully getting acquired and again, maximizing your exit. So starting with first impressions, that's the first thing we're going to be talking about. The first impression of this webinar is about first impression. So number one, be available. So when you're, you're selling your business, you want to sell your business. I know that sounds really, really basic, but you need to do things such as respond promptly, ideally within an hour or at maximum within 24 hours. Introduce yourself, introduce your goals, let buyers get to know you, and then also when you go live on acquire.com open your calendar and expect to have multiple buyer calls and just be available for those calls because buyers will want to speak to you. And that's your opportunity to introduce yourself and that's your opportunity to sell your business to potential buyers. Also, be informative. Some easy ways to do this is to create what's called a living Q and A doc. And essentially what this is is a document that any time a buyer has questions, you put it into a single document that you share with other buyers. And so the best way to do this is typically a Google sheet. But you don't share with buyers. You just have it where everyone can view it so all the buyers can't see who else is, you know, looking at your deal. But it allows you to really save time repeating yourself. And also for buyers that may not respond to your initial request or reach out to schedule a call immediately, this can be a great way to inform them on your business and get them excited. Then also on acquire.com you can connect your metrics as well. So this is a great way to really show buyers a true financial of your business. So you can connect your billing, you can connect your payment system to give a real time look for buyers. And this creates a lot of trust, which creates more buyer interest, which creates more offers, and again helps you maximize your exit. So I highly recommend that and then just perfecting your listing, really pointing out the parts of the business that are great and that buyers are going to be looking at, making sure that everything is correct in terms of financials, business model, tech stack, as much information as you're comfortable sharing is, is definitely key because your listing is essentially think of it like a movie preview. It's, you know, it's kind of a little teaser in terms of, you know, getting buyers to access more information by signing an NDA and learning more about your business. So this is what draws buyer buyers in. And then this listing is really your opportunity to convert that interest into a potential buyer conversation. And then third, set expectations. So establish deadlines, draft the deal schedule, control the process, and stage gate the process. So in prior webinars, I've talked about a deal schedule and what a deal schedule is. Essentially it's a, a plan where you will have certain dates when you're working with buyers, where you will only take calls by a certain date and you're requesting indication of offers by a certain date and then formal offers by another date. An example of this would be, okay, so I'm selling my business be alive today, and then I get a bunch of buyer interest. And now what I want to do is I want to control all that buyer interest because you don't want a letter of intent coming in tomorrow and then another one next week and then one in three weeks, because it doesn't give you a chance to counter any of those or really leverage up the additional buyer activity. And so what a deal schedule will help you with is you will set the last moment for calls at February 1st, and then you'll set just verbal offers or indication of interest by. And that just essentially means the buyer is interested in moving towards a formal offer. And then you'd like to receive all formal offers by the end of February. So what you're doing is you're controlling the process and you're really pushing buyers down. Timeline that works for you, but then also the buyers as well. So everybody's on the same page. They have additional Questions, they know what timeline you're working with. But most importantly, it avoids the situation where you end up working with one buyer this week and then one buyer in two weeks and stuff like that. So controlling the process is actually absolutely key to, number one, selling your business. Then again, maximizing your acquisition. So highly recommend that. And if you're not familiar too, we cover that in more depth in other webinars. And then my team is happy to share what a deal schedule looks like if you have questions on that. Now, moving on to the next slide. So, what buyers expect of you and your listing. So buyers are looking for fit, credibility, and opportunity. So you want to be able to anticipate buyer needs and questions. So really what this means is understanding why is a buyer interested in your business. And the best way to figure that out is to. You can just ask what made you, you know, take this call with me today. That's a question that I love because it takes you in so many different directions. Because you'll have some buyers that are super interested in your financials. It could be your technology, it could be the types of customers that you serve. There's so many different reasons, but understanding the motivations behind a buyer and then really being able to hone in on those interests is absolutely key because it keeps the conversation more pointed on what's important to them as you're selling your business. Number two, back up all claims of facts and figures. Nothing kills an acquisition faster than surprises and numbers that don't add up. So make sure when you are speaking with buyers, you are able to back up your claims. Any sort of facts or any sort of information or questions that you answer, that they are answered accurately and you are able to back them up. Because again, surprises kill deals more times than I've. I've seen, and they can easily be avoidable. The next one would be be upfront about problems and potential solutions. So on this one, not every business is perfect, and that's okay. So there's a saying where you want to take your business to market with bumps, bruises, and all, because any sort of problems you have. And maybe an example would be you had a marketing campaign that didn't work out, you hired someone that didn't work out. Um, maybe you release a feature and no one adopted it or something like that. When buyers hear these, you know, problems, maybe you're speaking with someone that's really good at sales and that's an opportunity for them or someone that's really good at marketing, and they could fix that campaign. So understanding that you know, the parts of your business you may not be the most proud of could actually be huge growth opportunities for potential buyers that are experienced in marketing, sales, product development, what, whatever it may be. But pointing out those things can really get buyers excited because most are looking to buy a business, to grow the business. So understanding what hasn't worked in the past can be huge. Moving on to the next one. Be easy to work with. This is huge. There's a saying, you know, it's really hard to do a. It's hard to do a good deal with a bad person. So have you done your homework? Are you open to negotiating with buyers? Are you communicating with them at all? That's just the, the basics. Are you responding to questions? Are you prompt in your. The responses? Are you giving detailed answers? Or are you, you know, holding everything back and just making everything kind of difficult for buyers? And what that does is that gives buyers kind of an indication of what due diligence is going to be like, because no buyer wants to feel like they're pulling teeth to get information out of you. Obviously don't give, you know, the password to your servers. But if they have questions like, what is your cac? What is your ltv? What is your growth rate? All those items you should have prepared in advance. And if a buyer wants to drill down deeper onto those questions, be open and just be easy to work with and provide those questions in a timely manner. And then really sell the opportunity. What makes your business special? So share your unique selling proposition. Prepare evidence in advance. Emphasize opportunities, counter objections. You're going to get objections from buyers across the board, and you want to be able to counter those in advance. And the more buyer calls that you take. So even if you have a buyer that maybe doesn't seem like the best fit or whatever it may be, still take that call because it could be used as a practice call. You can get feedback from the buyer, or maybe they end up acquiring your business. And I see that all the time where some random person who doesn't have maybe everything together, they end up being the buyer. So I'll go. That. I'll. I'll go into that more in a little bit more detail. But treat every buyer like they're the buyer until they're not, and also invite scrutiny. Ask buyers what do they not like about your business. That is an easy way to figure out what is their objection so you can counter them up front rather than the buyer just not telling you and you just kind of have to guess. Just ask, is there anything about my business that you have concerns with the things that you know, I think, you know, we should dive deeper on. Just asking questions with buyers can really help the conversation flow in a positive direction. And then obviously answer all questions and really leverage buyer interest. That's probably the biggest one at the end is leverage buyer interest. But you have to do all the steps above to do that. And what I mean by leveraging buyer interest is the more buyers that you have interested in your business, the more buyer conversations that you're having, the more offers that you're going to potentially receive. And that allows you to push up the valuation of your business and give you leverage to negotiate on price, on terms or whatever is important to you. Now moving on to what buyers expect of you and your listing. So firstly, honesty again, be honest about everything. Surprise prizes, if you, if you got them, they'll come out and just, it's bad form to just, you know, mislead buyers in any direction. Be honest about why selling. That's going to be a big question with any buyer is why are you selling the business? A buyer is going to want an honest answer. Maybe it's, you're looking to cash in your chips, you built an amazing business, maybe you have another business and you're looking to focus on that. Maybe you have to sell the business for just some different reason. But having a clear and concise answer to just questions like that and really showing honesty goes a long ways with buyers. Because you need buyers to trust you. You know, you're selling businesses for 500, 000 on the, on the low end up to, you know, 5, 6, 7, 8, 9, $10 million. So trust and just being honest is a huge factor in making these, these acquisitions happen. And then also be open to entertaining all offers. And what this just means is you're open all offers. And you know, that doesn't mean that you'll accept any offer, but it means you'll at least entertain an offer. And that's important because the more offers that you get, the more you're able to leverage buyers and negotiate again on terms and valuation. That's, that's how you maximize your acquisition and then be transparent. So you want to have a profit and loss statement. These are kind of non negotiables as the deal size goes up. So you gotta have a clean pinot because for most buyers this gives a full view into the financial health of your business. And if you have these items prepared in advance, it makes the calls when you have the buyers go so much easier because they are already up to speed on the quality of your business. And the questions are going to be more pointed and it's going to be a better use of both of your time. So take the time to put together P and L. Be transparent in terms of common buyer questions that you should expect. These are all documents that we have@acquire.com that we can provide to you. You want to have a completed sim, which stands for confidential information memorandum, basically a pitch deck, but in reverse for selling your, your company. And then again, answer all questions in a timely manner. I'm probably going to be repeating myself quite a bit in this webinar because again, when you're, when you're taking your business to market, there's a big misconception that you just listed on acquire.com buyers sign NDAs, and then one just shows up and says, here's a million dollars. Will you take it? It doesn't work like that. You have to speak to buyers. You have to sell your business. You have to get them excited. You have to understand their motivations. You have to be prepared in advance. You have to be honest. You have to be transparent. And then the last part here is really pointing out the opportunity. Discuss the upside of your business. What are the great things that you're doing? Are you growing really fast? Are you really profitable? Have you built some novel tech that could be utilized in a different industry? And also discuss the downsides of your business. What has, what have you tried that didn't go right? If you had a million dollars, you know, what would you, you know, spend that on to grow the business? You know, where, where is the upside in the business? There's upside in things that you're doing right and there's just by doing more of it. And there's also upside in, in the downsides by figuring out how to make what maybe you've done in the past work better. And discussing these growth opportunities with a new owner is huge because again, most people looking to buy businesses, I'd say probably all of them are looking to buy businesses where they can grow them in some manner. So if your business is, if you present your business as just absolutely perfect, there's no problems at all. There's nothing to fix. You're either going to sell it for a low, a bunch of money, or no buyer is going to believe you because no, no business is perfect. So being able to point out, you know, the best parts and also, you know, the potential opportunities and the downsides of your business is huge. Now, moving on to buyers. So we have around almost 400,000 buyers on acquire.com looking to buy businesses of all types. And there's three ways that I like to think about qualifying buyers and are they capable, are they serious and are they credible? So starting with the first one, are they capable? So do they have verified funds? You can see this on the Quad.com profile. If you get deep into a conversation with the buyer and you're not sure if they have a certain amount of cash on hand, maybe you're selling your business for $2 million. Do they have that capital? Do they have a loan approved? You can just ask them to verify their funds through acquire.com and my team will work through whatever documents they have to verify if they have the capital on hand. So that one's really important because if they can't verify they have the funds, proceed with caution. Two, look at their experience and their expertise. You can look at their LinkedIn account. You can do some research on Twitter. You can type their name into Google. Google definitely research the buyer. It's a two way street. So buyers are doing a ton of due diligence on your business. They're looking things up. You also want to do that on buyers that you're getting close with in terms of the ones that you might actually sell to and then again anticipating your needs and questions. So the, the best buyers can usually tell they've read the sim, they've read your reason for selling, they've gone through the P and L. So you can tell they're just a level of, you know, preparation in terms of making them capable of acquiring the business. And then are they serious? So detailed acquisition criteria. So on their profile you can see a detailed description of who are they, what are they looking to acquire, what is their background? Also when they speak to you, do they ask detailed questions or are they really high level? It's pretty easy to tell if someone's done their homework. And when you get on a call with them, the questions are, you know, very pointed and specific to your business. For example, if you have, if you have a full P L, that shows the revenue that you're making and the profitability of your business and your margins and they're asking about margins and stuff like that. You know, it might be a good idea to just, you know, point them to the documents that you already have, review those and then set up an additional call. But always be polite, always be respectful and direct sellers in the right way. But that's a good indication of, you know, how serious are they and how much homework have they done in advance before setting up a call with you and then are they prepared for an acquisition process? One easy way to really figure this out is just asking, moving over to are they credible is do they have a due diligence schedule they can share with you? Have they completed any past acquisitions and if so, what were they? And depending on the size of your deal, are they willing to give references in terms of how the acquisition, acquisition process went with them? What is their professional history? Do they have a verified profile on acquire.com all of these things add up because they give you little inklings of is this buyer again capable, serious, credible? You know, just every little yellow flag. As they start to add up, you know, they start turning into red flags. So these are things to, you know, kind of think about as you're speaking with buyers, especially as you get closer towards formal offers. So when you receive a bunch of formal offers, this is kind of what you want to run all the buyers through. We do see offers come from, you know, buyers that may not fit every single box here, and that's okay. But when it comes down to selecting the winning bid, you're going to want to do due diligence on the buyer just as much as the buyer is doing due diligence on you. Now moving on to how deal structures affect your exit. So common deals that we see, we see some, some pretty, pretty interesting deal structures, but the most common ones are all cash at close. So what that means is you close the acquisition and a hundred percent of the purchase price is going to be wired over to you on the day of close. That is the best deal structure that you can possibly get. We also see earnouts, which is basically conditioned on payment or, excuse me, performance of the business over a one year, two year, sometimes four year period. And then we also see a lot of, a lot of seller financing as well. And if you don't know any of these terms in terms of earnouts or seller financing or conditional holdbacks, go to our blog and just Google or excuse me, type those in and we have articles that go into more depth. But seller financing is definitely one that you're going to see quite a quite often. And an example of that would be you're selling a business for a million dollars, the offer is 70, cash and close. So that would mean you get 700,000 when the deal closes. And then the remaining 30% you're essentially financing to the buyer to be paid to you over a 12 month period, 24 month period, 36, sometimes 4 years, depending on the size of the seller financing note. But what this really does is it helps close the gap with buyers. So some other deal items to note is more cash on close does typically mean a lower purchase price. And that's because the buyer is taking on so much risk. And what I mean by that is when they acquire the business, you could just disappear. Things might not be completely up to, you know, what was, you know, proposed to them, whether that's financials, the product, it could be a number of different things. Um, and your, your goal when you're negotiating with buyers is you want a win win solution. So you want a win win offer. If your business is absolutely phenomenal, you have a bunch of offers and you want cash on clothes, you can definitely achieve that. We see it very often. Typically it'll just come with a three month transition period to make sure that everything goes smoothly as you transfer over the business. But as the valuation goes up to protect buyer's risk, that's when you started to see things like earnout, seller financing and another a number of other different terms to really reduce the risk of the buyers so when they buy the business it doesn't just explode the next day because they miss something. And then fun fact too as well. We review Lois all the time on acquire.com so if you ever have any questions on what do these terms mean. Is this a good LOI? Just today I was reviewing an LOI which was I believe 10 cash enclosed and 90 seller financing obviously told the owner of the business to pass on that one. And the reason to pass on that is you're getting 10% of the total purchase price when you close and you're going to get 90 over four years. No, I would say at most seller financing that I like to see is 50%. Anything more than that, it just, it's, it's too much in my opinion. But depending on your situation, it could be great for you. It could be not a great offer. And then also on deal items to note, pre qualifying for financing really increases your buyer pool. So we have third party financing partners where we'll actually pre finance your acquisition so buyers can take out a loan to buy your business. And this dramatically increases the buyer pool. So I highly recommend doing that. And if you need more details on how we do that, how it's done, feel free to reach out to support acquire.com and we can assist you with that. And now how to negotiate. So I'll dive into each of these points in more detail. But this is really just kind of the, the basics that you Just got to get right and you got to understand. So be open offers and different deal structures. So the more that you're open offers, the more you get buyers. And understanding that you're open to entertaining different offers, given that they might value your business differently than you, you're open to different types of deal structures. You're not hard and firm on a specific price with specific terms. And if you are, that's okay. But it will reduce buyer interest because it shrinks the buyer pool in terms of their ability to put that deal structure together. Because your ideal goal is to create a bidding war. Because if you want all cash on close, if you want certain terms, or if you want a certain valuation, the best way to get that is to create a bidding war with multiple buyers and multiple offers. We recently had a startup on acquire.com that had, I believe, 15 different offers. And when you get that many offers, you're able to increase the price. You're able to leverage against terms. And so the winning bid, you know, obviously had the best price and the best terms, but that was only because there was so many different offers. Now, in terms of negotiations, I think the biggest item I'd love to debunk is pricing high really shoots you in the foot. And the reason I say that you want to price low to sell high, and that's because when you price low, what that does is it gets a lot of buyers interested. The more buyers that are interested, the more buyer calls you're going to have, the more buyers that you're going to have potentially submitting offers. And that allows you to increase the valuation. Usually when you have one buyer, you have no buyers. So you want to have as much buyer interest as possible. Take as many buyer calls as as you can. That's when you would put down a deal schedule to control all of the activity and conversations with buyers. And then when you receive all the offers around the same time, that's when you can really start negotiating with leverage on price terms or even both or whatever is most important to you. And then this one below that is be open and upfront. Just be transparent with buyers in terms of what you're trying to accomplish. And you really need to understand that you have to sell your business like, unless your business is just growing like crazy. It is just the perfect business priced correctly. You're going to need to talk to buyers, you're going to need to put together certain documents, you're going to need to make buyers lives easier because most buyers typically are looking at sometimes 100 different businesses. A day an analyst at a private equity firm as, as an example will, will look at 50 to 100 businesses per day. So if you think about how many businesses per month, you want to do everything you can to stand out. And that includes being upfront, being open, responding to every single lead, treating every buyer like they're the buyer that until they say that they're not interested. And again, really selling your business, selling the good parts, the bad parts, and really doing this to create as much buyer interest as possible. And that is what again, helps you maximize your exit. Diving in a little bit more on how to negotiate. So one of my favorite quotes, and I've already said it, but if you have one buyer, you truly have no buyers. And the reason for this is you have no leverage. So as an example, if you have one buyer that gives you the best terms, the best offer, you know, sometimes we see that work out, but typically buyers need to know that there is backup buyers, that there's other buyers interested. And that also gives buyers the perception that there, given that their other buyers are interested, this is a good asset and this is one that they want to purchase and this is a good company and this is worth their time acquiring. So if you have one buyer, what can happen is they take their time with due diligence, they, you know, wait till the last minute and they lower the price and stuff like that. So when you have multiple buyers, it really, it helps you keep the leverage in the acquisition process to again maximize your exit and push the terms that are important up, up to you and then also your valuation. So again, being a little bit repetitive, but be open and upfront, tell buyers your goals, tell buyers what deal structures you'd accept and you won't accept. This one is big as well. Like for me personally, when I sold my first business, I was not interested in an earn out. I was proposed one, I said no. And so sometimes you do have to put your foot down and the person who wins a negotiation is the person that cares the least. So when you negotiate, we recommend negotiate negotiating on ranges and not absolutes. So instead of saying, I absolutely need to have this, I absolutely need to have this, and I absolutely need to have that, I think the best time to start doing that is when you actually have offers in hand. And before you have offers in hand, you want to make sure that you're talking in terms of this is kind of like the price range I'm thinking of. This would be, you know, obviously what I'm hoping to get my business for and then this is my walk away price. You don't necessarily have to say these to buyers, but have them written down and just don't go beyond them. But your goal again is to get buyers interested, get on as many buyer calls as possible and then have buyers submit as many offers as possible. And then from there you're able to negotiate terms and valuations up to maximize your exit. And we see this all the time on acquired.com literally every day. Moving on. So every buyer is a buyer until they are not. So when you are selling your business on acquire.com follow up with every lead, follow up with every conversation and don't stop until the buyer says stop. And there's a lot of stats around sales and you are in sales. When you were selling your business, you were selling your business. So even if a buyer doesn't respond back with a message, still follow up. Say, you know, hey John, you know, thanks for showing interest in my business. Here's my calendar to schedule a call. P.S. here's a list of other common questions from buyers if you're interested. And just keep following up. There's some stats that show that it can take, you know, five to six follow ups with buyers to, you know, sell a product. And this applies to selling your business as well. Because sometimes buyers aren't initially interested, sometimes they don't know how serious you are about selling. Maybe they need more information. And so treating every, the every like, treating every buyer like the buyer until they're they are not is a great way to maybe a buyer signs an NDA, never gets back to you and you think they're a tire kicker and you know, whatever, maybe, but keep following up with them until they say, hey, I am not interested in this business and then you can move on. But I have seen situations on acquire.com where the buyer we had no idea was going to come in comes in after the fourth response and they are absolutely interested and they end up winning the top bid and they end up becoming the acquirer for the business. Now moving over to, you know, how to position your business in terms of price. So high to low is wrong. Low to high is right. Now this is a huge misconception when going to sell your businesses, you know, set the highest price possible. Because if I, you know, set a really high price, then that's how I'm going to sell my business. But it doesn't work like that. The reason you want to price down is what it does is it maximizes interest with buyers. So you get more buyers interested in having a Conversation with you, learning about your business. Because if you put your buyer hat on, just even reading your confidential information memorandum, or going through your PNL or looking at your product, or just signing up to try it out, or reading customer reviews or whatever it may be, all that takes a lot of time from buyers. And if your price is just super high and it just is completely out of market ranges, you're not going to have an opportunity to even speak to these potential buyers. So again, to maximize your acquisition, you want to price at a realistic valuation, which we help with@acquire.com talk to as many buyers as possible, solicit as many formal offers as possible, and that's when you push up on terms and valuation again to, to maximize your acquisition. Now, sometimes things don't always go as planned. So, so what do you do when you're not getting offers? So starting with no buyer interest, the first question to really ask is, is it, is it you buy? Do you have an unrealistic asking price? Are you not responding promptly to buyers? Are you not giving buyers enough time? Are you saying, hey, I need to sell this business in a week or something like that? Which can kind of, for me that would be a red flag. I'm immediately wondering, is this a fire sale? Is this business about to explode in a week? So be aware of that. Also just being difficult to work with if you're hard to get on the phone, if you're slow to respond, all these different things just by being quick to respond, by being quick to hop on a call, being quick to answer my questions. Again, all this really will set you apart from so many other businesses on the market today looking to sell. So definitely keep those in mind, refusing transition periods as well. Because again, when, when you buy a business, you're taking on a lot of risk. As a buyer, there's so many things I don't know about your business. But you know everything because you've been running the business for two, three, four, five, maybe 10 years. So you have a lot of information. So any sort of transition period is going to really help make me comfortable buying the business. Because I know as we transfer the business over into my hands, if anything goes wrong, if anything breaks, you help me with that transition period. So when you go to sell your business, I would definitely expect to have some form of transition period. As an example, um, when I sold my first business, I negotiated a 90 day transition period. Sometimes you'll have a situation where it's a 90 day transition period and then beyond that it's a consulting Agreement. Sometimes you can even get equity in the business if you say, you know, I'll be around for any sort of questions and I'll help out with this. X, Y, Z. Sometimes during the acquisition, you're actually brought on for a period of time, so you'll get a salary depending on the buyer that you're working with. But you definitely should expect some sort of transition period and then not asking for offers. So when it comes to offers, you, you want to just ask. Just, you know, you're on a call. The buyer, maybe it's the first call, it's going really well. You know, one tip there is always book a meeting from a meeting. So when you're speaking with buyers, say, hey, I really enjoyed this conversation, John. You know, give time. Same time next week, I'll just move over the calendar, invite and check in there. Week goes by, John does his research on your business. He's really interested. On the second call, you can just ask, you know, hey, you know, where are you in terms of, you know, submitting an offer? Just ask. Literally, just ask for an offer and you'll get responses like, oh, I'm still thinking about it, or, you know, I'm really interested, interested in this business, but I'm still working on these things. But just the ask alone. Or it could be, hey, I'm, I'm going to submit an offer right away. Like, this is a business that fits perfectly with what I'm looking for. You've been really easy to work with. Very prompt acquisition was, you know, all the documents were prepared well in advance. So it could be a number of different things. But if you don't ask, the answer is always no. If you never ask, the answer is always no. So definitely ask. Do you have any interest in submitting an offer? If not, why? And then that feedback, even if they say no, can be used with other buyers, because now you know what one buyer doesn't like about your business. So moving on to how to close the gap. So maybe you price too high. Reducing the price could be the trick. And one feature that we have on acquire.com, let's say you have a hundred NDA signed and you've priced at a certain point, maybe it's above market ranges. If you reduce the price by just 10%, all buyers will be notified that you've reduced the price, which is a great way to follow the buyers if you're just not seeing interest and then also just being patient. We work with a lot of founders where they think, okay, I'm going to list my business. I'm going to do minimal work and then offers are going to be thrown at me in two weeks. But it takes time. Like the first month is typically, you know, getting to know buyers. The second month is typically diving into the business a little bit more. And then month three is typically where you start to, you get formal offers, you accept that, one of those, then move into due diligence. And so it can take time to sell a business. It's not a week long process. You're not selling keys or a car where you just give the keys and you get to walk away. There's a lot, there's a lot more complexity to it and you should understand that and treat it as such. So be patient. Also keep growing. Definitely don't take your eye off the ball in terms of your business because you don't want to sell the business as it's declining, especially if you're in an M and A process. And then also listen to feedback from buyers. Some buyers will give you great feedback like for example, it's priced too high or hey, you know, your go to market strategy isn't profitable or I don't see how, you know, this could scale further from here. Whatever it may be, buyers are telling you exactly what they would fix if they were to buy your business. And so if you're just not getting any offers, but you're getting a lot of feedback on what buyers don't like, go back and fix all those things and then come back to market and you can potentially sell your business for more that way. And then also just being flexible with term, just understanding that, you know, it is rare to get all cash on clothes. It is rare to get, you know, the perfect valuation and the perfect offer. You have to understand that, you know, you need to make a scenario where it's a win for the buyer and a win for you. And that means that you're giving something and the buyer is giving something, you're taking something and the buyer is taking something. So you're both, you're both winning. Those are the best acquisitions where both the buyer feels like they're winning and also you as the owner of the business feels like they're winning. So that means both of you have to give up one thing or two things. Maybe that's a term valuation, whatever, maybe. But be flexible with terms and, and be again, easy to work with. And then lastly, ask for help. We're here to. We have a team of M and a advisors@acquire.com. our job is to help startups get acquired, we do it all day long. We'll help optimize your listing. We can get you additional marketing to our350,000 plus buyers. We also do one to one sales and negotiation coaching. So if you're in certain situations where maybe before you go to market, you want to be absolutely sure that you do everything correct, we have a team that will help you prepare, will help you with understanding what the acquisition process is, how to properly value your business, basically how to maximize your exit, and then also how to increase your odds of successfully getting acquired. So I always like to say acquire.com we have founders backs, so if you need help, reach out to my team and, and we'd be happy to assist. So with that being said, let's maximize your exit today. So feel free to reach out to the acquire.com team. You can create a listing as that comes in, my team reviews it and then we'll actually reach out with any questions or feedback and hopefully get you acquired. So I hope you all enjoyed that. And I'm going to move over to some Q and A now. How did everybody like that, by the way? That was, that was a lot of talking all at once. Okay, we're just getting the questions together and then I'll go through them and then we'll call, we'll call it a day. All right, so starting with the first question. So typically, how long in each stage in the deal schedule, from first call to initial offers to final offers? Okay, so we're going back to the deal schedule, if you remember, which is basically a way to contain the acquisition process and really get buyers on the same timeline. The short answer is it typically depends. If you're already receiving a lot of offers, you'll want to condense it, but typically I'd say 30 days, meaning you've been live on the marketplace for about a month, you're starting to see interest from buyers. That's a great time to put down the deal schedule and let buyers know that, hey, the last day for taking any sort of briefing calls is this date. I'm expecting informal offers by this date and then formal offers by this date. And that's usually stretched over a four to, to six week period. But it's, it's situational. But if I had to give just a straight answer, I'd say, you know, four to six weeks is typically how long you want your deal schedule to stretch. And the reason for that is you want to give buyers time. Like maybe they need more time to figure out financing, they need to do analysis on your profit and loss statement or whatever may be code review. Giving them enough time so they can put together a formal offer that again meets all of your requirements is key because you don't want to put together a deal schedule where it's like a week and then they have no time and then you kind of shoot yourself in the foot because buyers see that no one's submitting offers at the end of your deal schedule. So you want us, you want to propose the deal schedule to buyers when you feel like there's enough activity and interest for you to really start funneling that into formal offers. Great question. Okay, moving on. If I bet a buyer and they don't seem serious, how do I politely turn down their interest? Good question. Well, if you just don't, if you're number one, if you're not getting along with any buyer, or if you get any sort of, you know, gut feelings that a buyer just isn't the right fit for your business in terms of an acquisition, just be direct. Just be say, hey, John, you know, unfortunately, I don't think this acquisition is going to work out between us. I've really enjoyed meeting you. I'd love to see touch. Cheers. You don't have to be rude, always keep the door open. But if you're getting any sort of, you know, yellow red flags about the buyer, you know, feel free to disqualify them as well. Again, it's a two way street when you're selling your business. Moving on to the next question. Okay, I'm looking to sell my SaaS business for all cash ASAP, but I don't want to lower my valuation more. Is it possible to have it all? It is, yeah. I mean, it is possible. It's unlikely. But if, if you're firm on, say you need all cash and you want to sell this valuation again, the person who wins a negotiation is a person that cares the least. So if, if you say you know, 7 million and the buyer is saying 5 million and you can keep the business, like you're not in a rush to sell 7 million. 7 million. 7 million. I've seen it happen. And then buyers eventually, you know, that's the price. But it has to be worth that. The like, if the valuation is just, it's not worth 7 million, it's not going to happen. But if you're looking to sell it asap, again, you don't really have a lot of leverage. Like, why are you looking to sell it asap? That's my next question. And now I'M wondering, okay, if you're selling it as quickly as possible at a high valuation, I'm just gonna wait. So, you know, if you're looking to sell your business for all cash as soon as possible, typically we see these situations with people that just want to get rid of the business and they're not interested in a 10 or 20% increase by, you know, going through this whole acquisition shuffle, and they're, they're willing to just kind of get rid of the business. I would just price to sell and then get as much buyer interest as possible and just be clear that no seller financing, no earn out all cash on close. That's it. That's how I would handle that one. Next question. I want to be upfront with buyers about my goals, but it feels like I'm giving them too much leverage. How do I balance it? This is a good question. You know, you don't, in my opinion, you don't really give up a lot of leverage when you're talking to buyers by your goals because you're being honest. You're being transparent. You're just saying, you know, let's use while you're selling your business as an example. Maybe you just say, I've grown this as far as I, I can take it. Or maybe I just, I've ran this business for five years and I'm getting a little tired. You're not giving up leverage in these situations because you're being honest. You're creating leverage. You lose leverage when you start to make stuff up and then it doesn't make sense and the story just doesn't. Then buyers start to get sort of, you know, yellow flags or red flags about you in the business. So in terms of balancing it, I always say, just be honest, be upfront, and, and, and you'll be in much better shape. Okay, next question. How much time should I expect to invest in following up with buyers? I still have to run my business and my new venture, so I'm not sure if I'll have time to get back to every person. I love this question. So when you go to sell your business by being honest, candidly, you're, you're like picking up another job. When I sold my first business, I literally was doing due diligence. I got married in Cancun, and I was doing due diligence during that week in, in Cancun. And so, you know, it's, it's, it's a new job. You got to run the business, and then you also are working on selling the business. You're going through due diligence items, you're speaking with buyers. So when you sell your business, if you truly want to maximize your exit, do not underestimate how important it is to speak to buyers to sell your business, being open to all offers and just being easy to work with. So it does add a, a substantial amount of additional time if you want to again, maximize your acquisition. If you want to just, you know, sell the business quickly, you can have a super low price and just say, hey, I'm not taking calls and maybe you'll get some offers. But one of my mentors once told me, because I was going through due diligence and just, it got to a point where like, gosh, this is so much. And he just get, he gave me a piece of advice which was, you know, if you think about, if you think about an acquisition process, you know, maybe it's on the high end. It's 100, 200 hours of work, maybe let's say 500 hours. And he just told me, like, just think about how much money you're making per hour right now. And once I kind of had that light bulb switch, I thought, okay, I'm going to keep going, I'm going to keep talking to buyers, I'm going to keep submitting these due diligence requests and keep answering all these emails because in the end it's going to be worth it. And then also I'm going to continue to run my business. Next question. What do you consider an unrealistic asking price? This one is very dependent on the business. I would definitely recommend checking out our webinar on valuations because factors are, are churn, growth rate, profitability, market sector, business type. Um, it really, the list is, is kind of endless and so unrealistic. You know, I would, I would definitely point you to that webinar because we go in a little bit more depth. But I mean anything beyond what you're seeing in like public markets is probably a good baseline. Public SaaS companies are trading at, you know, I believe 6x forward revenue. If you're pricing above that, that's, that's where you start to get into areas where it's, it's just, it's too high. But definitely check out that webinar because we go way in depth on the data that we're seeing specifically on our market with our buyers. Okay, next question. What's involved in your negotiation? Negotiation coaching. Will it really help me sell? Short answer? Yeah, actually, yes. We're M A advisors, we're acquisition experts and we do acquisitions all day. The thing about acquisitions is, you know, this may be the only time you go through an acquisition. Maybe you sell, you know, two, three, four, five companies on the smaller end, maybe you have one large company. Whatever it may be, we do this all day, every day. Even right now, we're helping different founders with their positioning of their business, helping them prepare, help helping them with negotiations with, you know, layer of intents. So, you know, yes, it will dramatic if you, if you, I'll go as far as saying this. If you work with the acquire.com team, you take our advice, you listen to everything that we have to say in terms of preparation, going to market, how to position your business, and then we go ahead and market your business to buyers specifically interested in your. In businesses of your type. Your odds of getting acquired and maximizing your valuation go way up. If you do the opposite, where you just list on acquire.com ignore all of our advice. We have data that shows your acquisition success rate goes way down. So yes, and we're here to help too. So if you need help with negotiation coaching, please reach out. What are the benefits and risks of accepting an earn out? I'd rather not have one in my deal, but it can. But can it really open up that many more opportunities? This is a great question. So the, the risk of an earnout is, let's say, you know, you're selling a business for a million dollars and then it comes with maybe another, you know, million dollars in an earn out. The key part of the earn out that I would look at is is it realistic or is there now just basically maintain revenue at what it is today for the next 12 or 24 months and you get your out. Is it, you know, 10x the business over the next year? That's the risk of an earn out that I would not accept. But it can open up a lot of opportunity because if you do see future upside in the business and you do have gas in the tank to work with the buyer to really help grow the business further, it can open up more opportunities in terms of helping you sell the business for more. So the benefit is you can sell the business for more, but the risk is if the earnout is egregious or just unobtainable, then I would not accept that. Next question, should I adjust my price range while talking to buyers? Is that common? It actually is, yes. Sometimes you, you price a certain, at a certain multiple and then every buyer just tells you it's too high, it's too high and you're Just not seeing interest. And that's real feedback from the market. That's not our team telling you that your business is priced too high. That's real buyers telling you, hey, you know, we kind of, this is the area that, you know, we would value your business in. And if you start to see multiple buyers telling you the same thing, I would take that feedback seriously and then adjust the price based on, on that because you can draw more buyers in to again, have more buyer calls, get more offers, and then leverage all that to increase your valuation. Oh, here's a fun question. What's your best negotiation tactic? You know, when it, when it comes to acquisitions, you know, you gotta be able to walk away. You know, it may get to a point where, you know, maybe something happens. Maybe, you know, they, you sign a letter of intent, everything's going great, but then they reduce the price by 30% or something like that. As you get towards the end of the acquisition, they know you're tired. Whatever it may be, you got to be able to. The person who cares the most, or, excuse me, the person who cares the least wins an acquisition. So, you know, that's the best negotiation tactic, is holding firm on what's really, really important to you in personal experience. Going back to the sale of my first business, I did negotiate all cash on clothes, and that was important to me. And I did negotiate a short transition period. So those things, those were deal breakers for me if I didn't get those. And so I held firm. We kind of went back and forth a little bit. It doesn't work all the time. It depends on, you know, obviously the quality of your business. But I was lucky enough to do that. And the, the way I achieved that was again, I was willing to keep the business if I wasn't able to get those terms. Okay, this is, this is going to be the last question, but a good one to end on and also right on time. What's an example of a difficult negotiation or buyer you've dealt with? I could tell one. You know, recently we were so we specifically interested in your, in businesses of your type, of your odds of getting acquired and maximizing your valuation. Go way up. If you do the opposite, where you just list on acquire.com ignore all of our advice. We have data that shows your acquisition success rate goes way down. So yes, and we're here to help too. So if you need help with negotiation coaching, please reach out. What are the benefits and risks of accepting an earn out? I'd rather not have one in my deal, but it can, but can it really open up that many more opportunities? This is a great question. So the, the risk of an earnout is, let's say, you know, you're selling a business for a million dollars and then it comes with maybe another, you know, million dollars in an earn out. The key part of the earnout that I would look at is, is it realistic or is earn out just basically maintain revenue at what it is today for the next 12 or 24 months, and you get your hand out. Is it, you know, 10x the business over the next year? That's the risk of an earnout that I would not accept. But it can open up a lot of opportunity because if you do see future upside in the business and you do have gas in the tank to work with the buyer to really help grow the business further, it can open up more opportunities in terms of helping you sell the business for more. So the benefit is you can sell the business for more, but the risk is if the earnout is egregious or just unobtainable, then I, I would not accept that. Next question. Should I adjust my price range while talking to buyers? Is that common? It actually is, yes. Sometimes you, you price a certain, at a certain multiple, and then every buyer just tells you it's too high, it's too high, and you're just not seeing interest. And that's real feedback from the market. That's not our team telling you that your business is priced too high. That's real buyers telling you, hey, you know, we kind of, this is the area that, you know, we would value your business in. And if you start to see multiple buyers telling you the same thing, I would take that feedback seriously and then adjust the price based on, on that because you can draw more buyers in to again, have more buyer calls, get more offers, and then leverage all that to increase your valuation. Oh, here's a fun question. What's your best negotiation tactic? You know, when it, when it comes to acquisitions, you know, you gotta be able to walk away. You know, it may get to a point where, you know, maybe something happens. Maybe, you know, they, you sign a letter of intent, everything's going great, but then they reduce the price by 30% or something like that. As you get towards the end of the acquisition, they know you're tired. Whatever it may be, you got to be able to. The person who cares the most, or excuse me, the person who cares the least wins an acquisition. So, you know, that's the best negotiation tactic is holding firm on what's really, really Important to you? In personal experience, going back to the sale of my first business, I did negotiate all cash on close, and that was important to me. And I did negotiate a short transition period. So those things, those were deal breakers for me if I didn't get those. And so I held firm. We kind of went back and forth a little bit. It doesn't work all the time. It depends on, you know, obviously, the quality of your business. But I was lucky enough to do that. And the. The way I achieved that was, again, I was willing to keep the business if I wasn't able to get those terms. Okay, this is. This is going to be the last question, but a good one to end on and also right on time. What's an example of a difficult negotiation or buyer you've dealt with? I could tell one. You know, recently we were so, we had. We were helping a startup sell, let's just call it for, you know, 3 million bucks. And the buyer and the seller were having a tough time getting through certain terms rather than the valuation. 50% was going to be on cash on close, and 50% was going to be over two payments over two years. And so what we did was we basically went back to. And the deal blew up. And so what we did was we helped revive that acquisition by really figuring out what was most important to both parties. So for the buyer, it was really just de. Risking the acquisition. For the seller, it was increasing the cash on close. And so what we did was we actually lowered the price for the buyer, and then we increased the cash on close for the seller, made everybody happy, and then helped that acquisition successfully close. But we see a number of situations like that. And so when you get into these difficult negotiation situations, feel free to reach out. And we're happy to give our, you know, candid feedback on how we handle it and how we think you should handle it. All right, well, I hope you all enjoyed me talking for about an hour. How'd everybody like that? I'd love to hear your feedback, if anybody has any. All right, again, thumbs up. Thank you. Very insightful. All right, well, I appreciate you all. I'm rooting for you all. I hope at some point we can help you sell your startup. And again, if you're interested in our acquisition services, just go to core.com free to listing and we'll help you from there. And again, rooting for all you guys, one person. I hope you get the acquire handle. We're actually no longer interested in that. We're. We. We grew in that acquire.com but appreciate you all. And please, if you have any other questions, reach out to our team. We're here to help. We're here to help you maximize your exit and hopefully get acquired. And thanks again, everybody, for attending it. It really means a lot to me. All right, see everybody. Hope you have a great weekend and a great start to 2024. Cheers. And again, rooting for all you guys. One person, I hope you get the Acquire handle. We're actually no longer interested in that. Where we, we grew in that acquire dot com. But appreciate you all. And please, if you have any other questions, reach.