How do you prepare for an exit or acquisition scenario?

1 Know your goals

The first step to prepare for an exit or acquisition is to know your goals and motivations. Why do you want to sell your company or join another one? What are your financial, personal, and professional expectations? How do you measure the value of your business and its potential growth? These questions will help you define your vision and criteria for a successful outcome, as well as align your interests with your co-founders, employees, and investors.

2 Build relationships

The second step is to build and maintain relationships with potential buyers or acquirers. This means identifying and researching the most suitable and interested parties in your industry or niche, reaching out to them, and establishing rapport and trust. You can also leverage your existing network of mentors, advisors, customers, and partners to get referrals and introductions. The goal is to create awareness and curiosity about your company and its value proposition, and to position yourself as a desirable target or partner.

3 Prepare your materials

The third step is to prepare your materials and documents that showcase your company's performance, potential, and differentiation. These may include a pitch deck, an executive summary, a financial model, a customer list, a product roadmap, a competitive analysis, and a due diligence checklist. You should also have a clear and compelling story that explains your vision, mission, values, achievements, challenges, and opportunities. The materials should be concise, accurate, and updated, and highlight your strengths and competitive advantages.

4 Negotiate your terms

The fourth step is to negotiate your terms and conditions with the buyer or acquirer. This involves discussing the valuation, the structure, the timing, the payment method, the earn-out, the retention, the integration, and the exit clauses of the deal. You should also be prepared to answer questions, address concerns, and handle objections from the other side. You should have a clear understanding of your BATNA (best alternative to a negotiated agreement) and your walk-away point, and be ready to compromise or walk away if necessary.

5 Involve your stakeholders

The fifth step is to involve your stakeholders in the process and communicate with them effectively. Your stakeholders may include your co-founders, employees, investors, customers, suppliers, and regulators. You should inform them about your plans and intentions, seek their feedback and support, and address their questions and issues. You should also manage their expectations and emotions, and avoid any surprises or conflicts that may jeopardize the deal.

6 Execute your plan

The final step is to execute your plan and close the deal. This involves signing the agreements, transferring the assets, receiving the payments, integrating the teams, and transitioning the operations. You should also celebrate your achievements, thank your supporters, and share your learnings and insights. You should also plan for your next steps, whether it is staying with the new entity, starting a new venture, or pursuing other opportunities.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?