How entrepreneurs get paid after an acquisition?
There’s plenty to think about and keep you busy without even considering trying to navigate an exit for your startup.
The acquisition process alone is like a whole new MBA of hustle and hard knocks and street smarts crammed into a few months. Though how do you actually get paid if you make it through the finish line to the closing?
It’s worth thinking about now because you don’t want to count your chickens before they hatch, and how you get paid can dramatically change how much you should be asking for and when it is really worth selling your startup company and not.
Do not take another step or phone call in discussing selling your business until you know about getting paid.
How Long Does it Take to Close an M&A Deal?
More than anything when you are thinking about how entrepreneurs get paid after an acquisition, the most important piece of information is the section of the LOI that would talk about the closing, the longer it is going to take to get paid.
An acquisition is nothing like one-click Amazon Prime Air, with 30 second delivery by drone.
How long it takes to close can depend on who your buyer is, how big the deal is, how organized your accounts and documents are, and any crazy events that happen in the middle.
The longer the deal takes, the higher the odds issues will arise. The economy can burst, terror attacks can throw markets into chaos and markets can be disrupted by other players.
The fastest deals can happen in as little as 30 days. Though they can stretch out for over a year if you are unlucky.
Remember that mastering the storytelling side and how you are positioning your business is critical when it comes to engaging and speeding up the process. This is done via your acquisition memorandum. This is super important to reach a successful acquisition. For a winning acquisition, memorandum template take a look at the one I recently covered (see it here) or unlock the acquisition memorandum template directly below.
When You Get Paid From Selling Your Startup
If you are wondering how entrepreneurs get paid after an acquisition the good news is that you should get some money on the day the deal officially closes. Cash can be transferred to your bank account the same day. Stocks can be dropped into your brokerage account.
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