Are you thinking about your to sell company, but are you still doubting the right time? Then think about selling your business in smaller steps. More and more entrepreneurs are opting for this phased outflow, also known as pre-exit. And with success, because in the long term this (often) even yields more than if you continued to build independently for a few more years. Below are three reasons why selling your business in steps to consider:
1. Investors/buyers often bring knowledge and expansion opportunities
Joining a (strategic) buyer can provide economies of scale, professionalism and further expansion. If you notice that you yourself are starting to run into barriers to growth, then this step is an interesting option. After all, a buyer is always looking for opportunities to make a company grow (and generate returns) faster. By taking advantage of this opportunity you have the opportunity to significantly increase the value of your remaining share. In addition to these value increase it is often also useful for personal development as an entrepreneur to enter into this cooperation. After all, there is a lot to learn from the approach of others.
2. Thanks to the pre-exit, personal financial risks can be spread
Many entrepreneurs have the majority of their assets in the company. Logical, because this is the only way they have been able to grow their business. Thanks to a pre-exit, part of this capital becomes available to secure old age on the one hand, but also to do more fun things. Buying a dream car, investing in other fun startups or a holiday home abroad are often chosen options.
3. More time for things you are really good at
Partial sale of your company often also creates space to focus on things that you are really good at (and probably also energize). We regularly come across entrepreneurs who proverbially 'have to keep all the balls in the air' and therefore have to do things that they are actually not good at at all. Hooking up with a professional party breaks through this, because specialists often come on board with the steps who simply pick this up. It is also not surprising to work one day less in this situation and thus also improve the balance in your private life.
Are there only advantages to the partial sale of your company? No of course not. Also expect to be faced with fewer freedoms. The purchasing party almost always demands (majority of) control and this restricts your entrepreneurial freedom. For some entrepreneurs this feels like 'working for a boss' and that may be a reason not to take this step. Side note is; even in the case of a complete sale, it is often required that the entrepreneur remains associated with the company for a longer period of time. In short, this point stands or falls with the click you have with the potential buyers.
Do you want to know more about selling your company in steps? Read the experiences of other entrepreneurs. A valuable appeared on February 27 article in the FD with case studies. In addition, at No Monkey Business we regularly help Tech entrepreneurs who want to sell their company in parts. Curious how? Click here for scheduling an appointment.