With the constant stream of doom and gloom news it may appear impossible to sell your internet business in these current market conditions. The M&A market place, although badly bruised, is still standing and M&A deals are being closed. Sellers should be aware that strategic buyers have moved back into the mergers & acquisitions arena displacing financial buyers. Typically more risk adverse, these strategic buyers remained on the sidelines during the private equity groups feeding frenzy of a couple years back. As a result of this shift, sellers should plan and be prepared for when a strategic buyer knocks on the door.
Perform an internal assessment of current readiness to respond by asking:
From a historical perspective is now the right time to sell your internet business given current revenues, profits, industry ranking and overall industry trends? Are financial records in crystal clear shape with all supporting documents available? Do you know the minute details of your customers historical behavior with your company? Do you have a 1-3 year detailed business plan outlining your sales and marketing objectives along with proforma financial statements? Are there solutions and resolutions to existing legal, operational and management issues?
The level of detail you have ultimately translates to the valuation that will be placed on your internet business. Buyers recognize that all businesses have a blemish or two showing. How your management team, investment banker or internet business broker handle these will play a critical role in keeping a buyer engaged. In other words, don’t bury it and hope it will not be discovered by the buyer
With risk adversity running very high, sellers should be prepared for extreme thoroughness when a buyer undertakes due diligence. Full disclosure and transparency will be expected. Therefore, spending more time on preparation in the anticipation of the due diligence process will significantly reduce the headache factor when the audit team arrives.
Rely on the experts!
Internet Business owners on the extreme end of the “Type A Personality” curve will still visit a dentist to get a tooth fixed or a surgeon to replace a knee (we hope), but then insist on going it alone when selling his/her biggest asset. This strategy, like trying to replace one’s own knee, is fraught with risk. It is imperative that a seller consider using an expert investment banker or business broker who has years of transactional experience.
Why use an Investment Banker or Internet Business Broker
- Will allow your company to be properly positioned with the buyers viewpoint in mind not the sellers.
- Emotions are met by a buffer zone that is managed by an expert inserting objectivity into a deal.
- Knowledge and access to wide range of buyers as well as experience in approach tactics.
- Experience in successfully managing buyers as they are moved through the deal funnel process keeping multiple qualified parties involved and knocking down buyer negotiation tactics.
To obtain the most desirable outcome, the selling of your web site business for its highest valuation, rely on the expertise of a professional investment banker or an internet business broker.