9 Essential Tips for Your Company’s Exit Strategy

By: Sarah F. Chambless , Victoria A. Lupu

Whether you’re just starting up or you’re well-established and attracting offers, if selling is your goal, there’s no better time than now to start planning your exit strategy. Drawing on experience and insights amassed leading million- and billion-dollar transactions, Corporate partner Sarah Chambless and M&A partner Victoria Lupu recently spoke with members of the Female Founder Collective, sharing key considerations for founders looking to sell their businesses.

For more information, reach out to Sarah Chambless or Victoria Lupu.

  1. It’s never too early to start planning. You may be rightfully focusing on near-term goals, but keep an eye on the horizon. Planning early can save you effort down the road, and having a roadmap helps you make more intentional business decisions along the way.
  2. Get your financial house in order. Potential buyers are going to sift and pick through your financials during diligence—ensure you’re providing a full, accurate picture. Disorganization makes a bad impression, and putting in the effort now will additionally deepen your understanding of your own financials. If you don’t have an internal CFO, consider bringing in people who can serve a similar function.
  3. Lawyer up and find a banker. You simply can’t do this alone. Find experienced M&A lawyers that have worked with companies your size and understand your industry, business model, and workflows.⁠ The same goes for your banker—you need someone who is good with deals your size and in your industry.
  4. Do your own research. Save yourself the heartache and do a deep dive on the acquiring company. Are they profitable? Are they fundraising? Who have they tried to acquire in the past? And importantly, how did it go? Work back channels to ask relevant companies about their experiences with your potential acquirer. Don’t let an unsophisticated buyer make their rookie mistakes on the company you worked hard building.
  5. Surround yourself with trusted industry veterans. Find people who have been in your shoes before, and then lean on their experience and expertise. These folks can help you understand each phase of an acquisition from the acquiree’s perspective—and their insights only become more valuable as deals progress and complexity rises.
  6. Use your own NDA. If you’re sharing confidential information about your business, you need to tailor your non-disclosure agreements accordingly. Templates and generated agreements can give a false sense of security and may not be appropriate for your company or a sale transaction.
  7. A one-page letter of intent is your enemy. In the excitement of a potential deal, they may seem like a simpler and faster approach to the often-intimidating term sheet, but they can also leave critical things unsaid and lead to disagreement and delay down the road. Hire experienced counsel to spot the hidden potholes and guide you around them, and don’t wait until the term sheet is signed to get them involved.
  8. Learn the lingo. The world of Mergers and Acquisitions is overflowing with terms of art and sometimes confusing terminology. To effectively negotiate, learn the lingo, and make sure you understand the material terms in a potential sale transaction.
  9. Hire true experts. When it comes to your team—especially deal counsel—you need experts who specialize in mergers and acquisitions. That’s not typically the person who’s been serving as your day-to-day attorney, and that’s OK.

Victoria Lupu is an M&A partner at Fenwick. She advises life sciences, healthcare, and technology clients on strategic transactions such as mergers, acquisitions, and divestitures. She has extensive experience in cross-border transactions involving companies across the globe.

Sarah Chambless is a Corporate partner at Fenwick. She specializes in working with rapidly scaling technology companies and their investors in industries ranging from digital health to frontier tech, helping them navigate financing, mergers and acquisitions, and corporate compliance.


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