What are the most common business acquisition mistakes that you may encounter during the process of selling your business?
An acquisition with a lot of zeros attached to it is the ultimate end game for most of today’s entrepreneurs and their investors.
Even if that wasn’t the original game plan, no one wants to mess up after receiving an attractive offer. Here are the top blunders not to copy from others when it’s your turn to cash in.
1. Accelerating Spending
Don’t count your chickens until they hatch. This is one of the most most common business acquisition mistakes. Selling a company can be a lot like selling a house or any other business deal. It’s not done until the money is in the bank.
While most founders I’ve interviewed on the DealMakers Podcast have been far more interested in the impact they have with their ventures than the money, that’s certainly not true for every entrepreneur and stakeholder.
Yet, it is extremely important not to accelerate personal spending or cash burn on the hope of a deal closing. You don’t want to put yourself in a position that may tempt rash choices, or send your business nose-diving into financial trouble if the deal falls through.
2. Getting Locked In
Perhaps the best goal and purpose of a startup exit is to maximize the potential of the company. It’s actually legally and ethically the only reason for a sale.
Second to that is the individual investors, and the team. Yet, as an individual, you also have a responsibility to the other people in your life and the world to be working at your own max potential and contribution.
One of the often unforeseen and lessor thought about the dangers of an acquisition is getting boxed in. That can happen by being locked into the company during a long resting and vesting period.
There are a few exceptions when it comes to common business acquisition mistakes in this area. A couple of the entrepreneurs I know with great exits have really enjoyed working at Google and Apple after being bought.
It was an opportunity to create something of value and learn a lot. Though most real entrepreneurs just aren’t cut out for being a corporate employee again.
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