February 5, 2016

There are many different factors that can trigger the discussion about selling your much-loved tech company: nervous investors, sudden success, industry consolidation, or burned-out founders. As you may approach this point what seems like suddenly, it’s a good idea to carve out some time to carefully thing about the strategy and process.

Be Realistic About the Valuation

The value of bringing in an outside person to value the company cannot be overstated. You need to have these expectations set as early as possible so that there is no confusion or disappointment down the line. A lot of tech companies gave factors outside of financial metrics to consider. Some of the elements that should be considered in a valuation are the value of your existing team, valuation activity in the space in general, and the possibility associated with outsized demand.

Set the Stage for the Company

There’s no point in talking about a sale unless you’re crystal clear on your processing. Financial statements should be clear and recently-produced. All documents for hiring purposes should also be clear and filed, such as non-compete agreements and IP contracts. 

Evaluate Funding Options

There are a wide range of investors available to tech startups: venture capital, angels, accelerators, crowdsourcing, and the list goes on. These all have different requirements and goals, so make sure you factor this into your exist as well.

Got questions about succession planning? Contact our office at info@lawesq.net