WEBVTT

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You've decided it might be time to sell your business.

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Now, the real hard work starts.

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So, what should you do first?

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Neil Balmert, an attorney with DLA Piper,

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gives us a to-do list for pre-sale planning.

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Well, thanks, Leo.

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Well, a business owner should really run a tight ship,

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I would say, financially and legally.

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Even from the start-up of the company,

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you want to make sure that the intellectual property

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is properly owned by the company.

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It has non-disclosure agreements with its employees.

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The books and records are properly run.

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And I would say, maybe most importantly,

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the accounting function is properly run,

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with proper financial statements and such.

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Neil, what are some of the pitfalls

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you've seen in this process?

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One is founders tend to be very smart people,

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and they're very smart in their field,

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which tends to be

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maybe technology or something like that,

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but they're not necessarily great managers.

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So, one thing investors bring to the table,

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venture capital investors,

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is forcing the company to run the company

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better from a managerial standpoint.

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But oftentimes, founders are reluctant

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to kind of give up the control of the business,

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and that's always a tension because it's their baby.

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They got it where they want it.

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They don't want to give up control,

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even though financially and for growth

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perspectives, that's the right thing to do.

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What are some key deal points in the sale agreements

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that you think are often overlooked?

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The important thing I would say

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because oftentimes the clients do that themselves

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and hand the signed

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letter of intent to the lawyer,

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and they've missed the five most important

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things you want to see in a letter of intent

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because they didn't know to ask for it.

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So, that's the most important takeaway, I would say.

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And then secondly, the agreement itself,

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So, price is important,

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but indemnification means the right of the buyer

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to claw back on some of the

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purchase price post closing.

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Neal, thanks so much for your time and expertise.

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If you have questions about

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what's best for your business, give us a call.

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We know your time is precious. Let's make it count.