About Us Offices Careers Blogs & Podcasts
Practice Areas Sectors People Insights
Practice Areas Sectors People Insights
About Us Offices Careers Blogs & Podcasts
Home Insights Considering Selling Your Company? Tip #2: Stage Your Company
See Insights
PDF

Considering Selling Your Company? Tip #2: Stage Your Company

23 September 2015 Innovative Technology Insights Blog

Nearly every founder or executive considers selling their company at one point or another. Before embarking on the complex process, it is crucial for the company leaders – especially within the ever-evolving tech community – to ensure their strategy encompasses all aspects of a sale, from understanding the environment to being accurate with pricing expectations.

In advance of the annual FOLEYTech Summit held on October 1, we are releasing five tips for a successful exit. See below for tip number two and check back here for more tips leading up to FOLEYTech.

2. Stage Your Company — and Yourself

You don’t sell a house without washing the windows and thinning out the closets. Likewise, your company should be orderly and tidy before you show it to prospective buyers. Building and running a company is hectic and time-consuming. A lot of seemingly small details can get lost in the noise generated by a growing company, but the time to address those details is before any diligence begins.

  • Financial cards must be current and audited to ensure that all transactions have been recorded correctly and that standard Generally Accepted Accounting Principles (GAAP) have been followed.
  • Develop and verify all documents regarding the onboarding of employees, including at-will work agreements; prior-inventions intellectual property contracts; confidentiality and non-compete agreements; and equity, options and vesting agreements. These documents from all relevant employees should be in good order prior to starting the due diligence process. Combing through files and fixing any issues before such a process begins is far easier than doing it in the heat of negotiations, or worse, as diligence requests pour in.
  • Founders should ensure their own interests are well protected in company vesting and equity contracts. This includes locking down elements like double-trigger acceleration vesting, as well as change-of-control incentives. Double-check personal and estate planning issues. The tighter your ship appears, the more comfortable potential acquirers — and their lawyers — will be in bidding for it.

For more information, visit Foley.com/intelligence.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Practice Areas
Mergers & Acquisitions Transactions

Insights