When selling business equity, you need to be aware of two things:
Who you’re selling your product to, and the amount of capital you’re willing to sell.
Equity partners could be family members, startup coworkers venture capitalists, family members, or angel investors.
It’s important to remember that selling equity doesn’t have m&a advisory to involve receiving capital investments. It could also refer to the commitment of time and knowledge.
A great case study on the importance of being conscious of whom you sell your products to and the equity you sell is in the following piece:
Company left with just a quarter of the sum
In 2006, Greg Alexander founded Sales Benchmark Index (SBI) an growth-oriented advisory firm. He offered two employees a stake of 25% each in the business. In the next 10 years and the company was valued at $162 million. But, due to the incredibly generous equity offer at the time the two employees of his company left with just a quarter of the sum – $80 million at the time that the business was sold to the New York-based firm CIP Capital. CIP Capital.
The idea behind the story is to be aware of whom you offer your services to and the amount of equity you offer away.
This is the first problem – the process of selling goodwill from business.
Who do you want to sell your company equity to?
In the beginning, you’ve to bring your business in a good position. Make any necessary adjustments prior to present your business to investors. For instance, make sure you have your financial documents up to date and get a an assessment of the value of your company performed by the independent consultants.
A seasoned broker can help you with the process m&a advisor of preparation required and help position your business as a lucrative investment.
Additionally, a broker will assist you to in attracting interested parties from a variety of avenues. In the end, you’ll probably opt to go with one or more of these:
Team is available to assist you determine the best path forward
- Making it public by selling it by a public sale (an costly and demanding process , but the tradeoff is the possibility of raising massive sums of capital)
- Peddling to large private investors (enter venture capitalists and angel investors)
- Selling to investors who are less well-known (private company owners that you may already know)
- Selling inside to employees (an excellent method to build loyalty among employees)
If you’re thinking of selling business assets it’s recommended to speak with an experienced broker. Sun Acquisitions is the place to go. Sun Acquisitions, our team is available to assist you determine the best path forward.
