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Friday, Mar 29, 2024

For Founders, Exit Strategy Gets Gamey

When selling a business, most people think the highest bidder becomes the buyer, but attorney and author Matt Crowley says that’s far from the case. Just last month, Crowley released his second book “Winning the Game: How to Successfully Sell your Business,” complementing his first book about how to start a business. “Because I work with a lot of startups, they will sometimes come to me or go to an investment banker and say, ‘We only have one month’s worth of cash left. Can you find a buyer?’ This is the worst way to sell yourself.” Crowley’s law practice – Crowley Corporate Legal Strategy in Encino – specializes in providing counsel to startups, which prompted his first book. Soon after, he realized many of his clients who needed help starting their endeavors also needed help exiting them. In “Winning the Game,” Crowley highlights the importance of understanding the motivation behind selling a business because that determines everything else down the line. When choosing a buyer, he also encourages owners to think globally and strategically as well as consider less obvious candidates such as customers and vendors. Many business books on how to sell companies have been published over the years, but Warren Feder, partner at New York-based consulting and investment banking firm Carl Marks Advisors, believes material on this type of transaction is especially useful in today’s economic climate. “Baby boomers are reaching their 60s and 70s and are considering selling their businesses.” he said. “Banks are looking to support loans for buyouts. Corporations have accumulated large amounts of cash, looking for assets to grow. Put all that together, and it’s a good time to be looking to sell your business.” But even in a good market, Crowley warns sellers that a deal can often take six months or more. “They will find if they start the thought process early, they can get organized early, making it (the sale) less painful,” he said. – Stephanie Henkel

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