TIMING AN EXIT: KNOWING WHEN TO SELL

Founders are often used to doing things on their own terms. But when selling a business, getting the best terms requires selling at an optimal time in the market and just the right moment in the life cycle of a particular business.

We speak to a lot of founders who want to sell their companies in the next few years. To ensure favorable terms and pricing it is critical to time your exit well. Ideally a founder would sell his or her company at a time when it has a track record of at least two to three years of growing but stable revenue. To ensure bargaining power, it is best to sell at a time the company has a strong financial outlook and the founder is still engaged and enthusiastic about running the business. If the founder tries to sell the company after it has fallen on hard difficult times or personal issues force the founder to sell quickly, the founder is not likely to fetch a favorable valuation or deal terms.

Doug McCullough | McCullough Sudan PLLC | [email protected]