Andrew Gazdecki walks through Acquire.com's letter of intent builder, a tool that lets you customize acquisition offers with terms like purchase price, seller financing, holdbacks, and escrow arrangements.
Foreign. How's it going? This is Andrew Gazdecki, the founder of acquire.com and in this tutorial I'm going to be going over our new letter of intent builder v2, which really adds a lot of flexibility and customization to the offers that you send startups that you're looking to acquire. And Our goal at acquire.com is to make startup acquisitions easier, more efficient, faster, to really help streamline and standardize the process for both the buyer and the seller to help more startups get acquired. So in this example, I'm going to go ahead and make an offer for 1.3 million with this founder Frankie, who's a great guy. And to do that I'm going to go to make offer and continue with my letter of intent. Now I'm launched into the letter of intent builder, which gives me a lot of flexibility to send over an offer that includes all the terms that me and the seller have agreed upon. So, so we've agreed upon a total purchase price of 1.3 million with additional payment terms post closing, such as seller financing. So we've agreed to 500,000 seller financing over a period of 12 months with zero interest, which essentially means that I'm going to pay 700,000 upfront with 500,000 paid over 12 months to really de risk the acquisition. And that is important to me as a buyer and then also as a seller. Offering seller financing can really increase the buyer pool for your startup, increase the chances of it closing. I've also added a conditional holdback. You can think of a holdback as basically an insurance policy on the business. I'm putting 100,000 here, hold back period of 12 months. And the holdback condition is zero outstanding litigation. So no lawsuits arise for unknown issues after I acquire the business. And if you're interested in learning more about holdbacks, you can go to our blog and read about holdbacks and examples and how does it work. But for brevity's sake, I'm going to keep moving here. We've also added the ability to add transition services for certain key employees, maybe the CTO or the owner. You need them on board for a period of time or you'd like to hire them indefinitely within the acquisition. So I've added Russ Hanneman and Warren Buffett and there may be certain items you want to put in a non competition or non solicitation agreement, which means typically the owner of the business cannot create a competing business post closing of the acquisition. And then we've also added an item for additional closing conditions that may be unique to the acquisition that you're facilitating. I've added the governing law, jurisdiction as Delaware. I've also requiring a confidentiality clause. This is important for both the buyer and the seller because it protects confidentiality for both of you. And then we both have agreed that during closing, we're going to use an escrow service and we're going to split the fees 50, 50. Now, just like that, I've created a letter of intent for this business. And if I want to download the letter of intent to review it before sending, I could download, download it, review it, and you can see the terms that have added in, such as 700,000 on close, 500,000 payable over 12 months. This is seller financing, and this would be the conditional holdback of 100,000 following zero outstanding litigation for 12 months. And when I'm ready, I just go ahead and sign. And you're able to sign on behalf of yourself or an entity such as gasdeck. You can Corp CEO continue send. And then I would just say, hey, Frankie, looking forward to working with you. And just like that, I can go ahead and send an LOI on acquire.com and that is one of the first steps of acquiring a business. If you have any questions, feel free to reach out. Cheers.
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