If you have been following our series on the major legal steps involved in selling an emerging growth company, you know that we have already come a long way in negotiating an agreement with a financial adviser as well as entering into a non-disclosure agreement with your potential buyer. You probably would not have gotten this far in an actual deal without at least talking about the actual terms of the potential deal with the would-be buyer, but at this point it is finally time to get some of those terms on paper, even if that paper is less than legally binding and the terms remain subject to change based on the due diligence that will be conducted by the buyer. It is at this point that you and the buyer will work toward either a term sheet or letter of intent providing the preliminary framework for a potential sale of your business.
Legal Considerations for Selling Your Emerging Growth Company Part 4: The Term Sheet or Letter of Intent
In the previous two posts in our series on legal considerations for selling an emerging growth company, we focused on providing an overview of the M&A process as well as negotiating an engagement letter with a financial adviser. In this third installment, we will take a look at drafting a Non-Disclosure Agreement (NDA) with a potential acquirer. What makes the NDA particularly significant for an emerging growth company entering into the acquisition process is that, unlike other aspects of the sales process such as due diligence or executing a letter of intent, the NDA should be drafted with a primary focus on the needs of the target company, and not the acquirer. Thus the burden lies more with you and your company in drafting an NDA that will protect your company’s intellectual property and strategies while at the same time providing a sufficient window into a company to your potential acquirer to entice them to move forward with the transaction. With those oftentimes competing interests in mind, we will take a look at the four central questions you will need to answer in drafting and finalizing a NDA.
Legal Considerations for Selling an Emerging Growth Company Part 2: Creating an Engagement Letter with a Financial Adviser
Last month, we began a seven-part series on “Legal Considerations for Selling an Emerging Growth Company,” and, in that post, we discussed six important steps in the merger and acquisitions process that emerging growth companies will need to prepare for, which are: (1) engaging a financial adviser; (2) entering into a non-disclosure agreement; (3) negotiating the term sheet or letter of intent; (4) due diligence; (5) drafting and negotiating definitive documents; and (6) closing. We will continue to dive deeper into each of these steps of the process, and this month we are focusing on the first step, which is negotiating an engagement letter with a financial adviser. [Read more…]
Everyone knows that a primary goal for many, if not most, startups and tech companies is to eventually sell the company, even if the founders intend to remain with the company. It goes without saying that selling your company can result in an enormous payday and provide continued vitality for the company going forward. That said, it’s critical that owners/entrepreneurs comply with legal requirements and protect their legal interests throughout the sales process to maximize their chances for a positive outcome.
With that in mind, this month I’m beginning a series of blog posts on the legal considerations you’ll need to keep in mind when selling your business. We begin with taking a look at an overview of the process involved in a merger or acquisition (often referred to as an “M&A deal”). Below is a high-level look at six essential steps to successfully completing an M&A deal, and in future posts we will dive deeper into what each one means for you. [Read more…]
In many ways, the dilemma of deciding whether to take venture capital money from an interested VC firm can be filed under “Good Problems to Have.” The majority of startups never get to this point, either failing outright, or, even if they are profitable, they simply never build the type of company profile that fills VC investors’ imaginations with visions of high returns. [Read more…]