Selling a portfolio business? Find the emotional buyer

By Dave Berkus, Chairman Emeritus, Tech Coast Angels

This is one of my favorite insights, since I lived this one in a positive exit from my computer business.

Types of business buyers expanded

Most people will tell you that there are two kinds of eventual buyers for your business: financial and strategic.  A financial buyer will analyze your numbers, past and forecast, to the n’th degree, and calculate the price based upon the result, after carefully comparing your numbers with those of others in the same and similar industries.  The object of a financial purchase is to negotiate a bargain, capable of payoff through operating profits or growth over time, or even of immediate profit from arbitrage – knowing of a purchaser that is willing to pay more for your company if repackaged, or even with no changes at all.… Read the rest

Timing is everything in a sale.

By Dave Berkus, Chairman Emeritus, Tech Coast Angels

Almost anyone who has sold a company has a story to tell about their good deal, the problems with the buyer, a last-minute change of terms, or more.

I have saved this next story until now because it is one of my favorites, and certainly illustrates the point about timing being a combination of luck and skill as well as anything I could devise from fiction.… Read the rest