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Selling your company involves an entire set of specific business and legal terms and conditions that relate solely to this transaction and are often new to first-time entrepreneurs. This document contains a helpful list of pertinent terms as well as some issues that the selling entrepreneur might consider before closing the sale.
When Bill Payne realized one of his company's patented products was being infringed by a key vendor, he knew he was in a difficult position to protect his patent. Payne and his team explored their options, including litigation, and decided to try and persuade them to stop their patent infringement practice.
Numerous factors affect how angels value a company. Primary are the strength of the management team and the size of the opportunity, or a company's potential to scale. Accompanying this article is a valuation worksheet that entrepreneurs can use to better understand what investors look for and to identify factors that can justify higher pre-money valuations. Investors will find it useful to compare companies and determine whether valuation should be higher or lower.
This informative piece explains a well-known method that venture capitalists use to determine "post-money valuation," which is a company's valuation at the time of investment. Perhaps more important, it provides valuable insights into why the returns expected by investors are often perceived as "too high" by entrepreneurs.
Selling your business to another individual or company is one of four usual choices for liquidating your equity. Here's a review of the pros, cons and alternatives that may help you evaluate your plans.
The litigation process is expensive and needs continuous involvement and monitoring. And having a plan is key. This article offers strategies and insights on these topics and more for entrepreneurs who encounter litigation.
Durability requires planning, says a seasoned entrepreneur who has founded his own companies and is helping others start theirs. Market conditions, management skills and smart money must be factored into the equation. Even with everything going for you, be prepared for a steep staircase and more than one ceiling to crash as your company climbs toward a successful future.
Entrepreneurs could give their budding companies a powerful financial boost by using a source of funding usually considered off limits--the retirement kitty. The author, a certified financial planner, does, however, caution company builders to leave a portion of those funds intact, using more accessible sources first. Thereafter, he argues, tax-deferred assets in a 401(k), SEP, or IRA comprise a personal venture capital fund that can do as much for an individual's business as for his or her golden years.
Selling your business is similar to raising capital. The difference: you're selling the whole company. Selling your company, like raising money, includes preparing the business plan, financials, cash-flow projections, and demonstration of Sarbanes-Oxley compliance practices.
When the attempt to buyout a senior partner failed, business partners realized the necessity for a buy-sell agreement...many years after the business was founded.
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