Selling Your Online Business, Part 3 – Who else is involved?

You’ve engaged a broker to help sell your business. Who else should be on your team, and who else is involved in the sale process?

Obviously, it is in your interest to find good legal representation that specializes in providing legal counsel to businesses, particularly in the area of mergers and acquisitions of online businesses. That is where we come it.

It is also in your interest to get your CPA involved for the business appraisal process. Although it might seem time consuming and costly to have a business appraisal done, we highly recommend that you have an appraisal conducted by a professional experienced in business appraisal techniques; a professional with experience in your particular industry is ideal.

An accurate business appraisal has several benefits. If your asking price is too high, you might scare away potential buyers. If your asking price is too low, you risk leaving money on the table. Also, having an appraisal conducted adds credibility to your ask. It shows where your figures are coming from.

It is important that your financials are in good shape in order to have an accurate appraisal.

Who else is involved in the process? The potential buyers and their respective counsel. A potential buyer could be an individual or perhaps a private equity group, each having its own benefits and detriments. A potential buyer may also have financial experts involved in the due diligence process. A potential buyer may have a lender involved that could impact the transaction and the relationship between you, the Seller, and the buyer. For example, if there is a seller finance component with a security interest, the Buyer’s lender may require you to subordinate your lien, and may place other restrictions on repayment of the seller loan.

We can help. The attorneys at Walk Law Firm, PA are experienced in assisting clients with navigating these various relationships. We understand the sale process and can guide clients throughout the transaction. Please feel free to call one of our attorneys at (813) 999-0199, or contact us via our website at www.WalkLawFirm.com.

© 2017 Matt Welker – This article is for general information only. Nothing contained in this article should be construed as legal advice or the formation of a lawyer/client relationship.


Selling Your Online Business, Part 2 – Who is this broker?

So, you have decided to sell this thing you’ve built from a hobby in your garage or a side-business to a multi-million-dollar online business. What happens now?

Many online business sellers engage a business broker. You could engage a general business broker or a broker that specializes in the brokerage of online businesses. We’ve found that the brokers that specialize in online businesses are more familiar with the nuances of online businesses and the different challenges that online business sellers face when selling their businesses. Obviously, there is a cost to engaging the services of a business broker. And any good business broker will require you to execute a contract that at the very least addresses their commission. It might be called a broker agreement or an engagement agreement, but it is generally a one-sided agreement in favor of the broker. We highly recommend you engage legal counsel to have this agreement reviewed before signing.

Don’t be fooled. The broker is a salesman and hopefully, for your sake, a good one, but keep in mind that he is selling you too. He is in this for the commission. Generally, the broker’s commission is based on a percentage of the overall purchase and sale price, or some percentage scale formulae (e.g., Lehman Formula, Double Lehman, Reverse Lehman, or some alternative or progressive fee schedule, which each warrant a separate blog article unto themselves). It may or may not have floor – i.e., it includes a proviso that the commission will not be less than a certain amount. A lot of online business sales include seller promissory notes, consulting agreements, earn-outs, and other methods putting value on the purchase and sale of the business. Many brokers will insist that their commissions be based on the entire purchase price, including any amount due under a seller note, consulting fee, earn out payment, etc. Keep in mind, the brokers agreement is a negotiable document, and you can structure it in such a way that it makes sense for you and your business.

We can help. The attorneys at Walk Law Firm, PA are experienced in assisting clients with the review and negotiation of brokers agreement when clients are seller their businesses. We understand what brokers expectations are regarding these agreements and we will balance these expectations with our client’s best interest in the sale process. Please feel free to call one of our attorneys at (813) 999-0199, or contact us via our website at www.WalkLawFirm.com.

© 2017 Matt Welker – This article is for general information purposes only. Nothing contained in this article should be construed as legal advice or the formation of an attorney-client relationship.


Selling Your Online Business, Part 1 – Selling Your Baby

You’ve birthed this awesome online business. For whatever reason (hopefully because you’re going to make a boatload of cash), you’ve deemed it to be in the best interest of the company (and in your best interest) to sell. It is important to have a general understanding of the sales process in order to: (i) simplify the overall selling process; (ii) make yourself, your company, and your advisors more efficient during the process; and (iii) to ensure a successful business closing.

This blog series on the legal considerations for selling your online business will provide an overview of the business sales process. Further, the series will touch on various phases (in relatively sequential order) of the selling process, including: engaging a broker; engaging a financial advisor or valuation expert (or both); negotiating the letter of intent; the due diligence process; negotiating a definitive sales agreement (and ancillary transaction documents); the closing process; and post-closing matters, including restrictive covenant arrangements.

The attorneys at Walk Law Firm, PA are experienced in assisting clients sell their online businesses. Please feel free to call one of our attorneys at (813) 999-0199, or contact us via our website at www.WalkLawFirm.com.

© 2017 Matt Welker – This article is for general information purposes only. Nothing contained in this article should be construed as legal advice or the formation of an attorney-client relationship.