Extraction From Eric Gilboord Online Courses
This is an extremely optimum time frame and would require a very well prepared Seller, highly desirable company, a qualified Buyer and may not include the transition time to ease out of the company post sale. All in count on 3-5 years.
4-6 Weeks Preparation
• 2 Weeks to gather the required information. The Intermediary will work with you to gather necessary information and to gain an understanding of the business (Information gathering is mostly a Seller responsibility.)
• 2 weeks for the Intermediary to compile the necessary Teaser and Confidential Information Memorandum documents (Mostly an Intermediary responsibility.)
• 1-2 weeks to review and finalize representations (Joint responsibility of Seller and Intermediary.)
1-3 Months for Soliciting Interest from Buyers (duration is very variable)
• During this time the Intermediary will mostly be talking with prospects, answering questions, feeding more information to them.
• Much of the effort during this phase is the Intermediary working with prospects, trying to figure out who are serious and who are not, filtering and moving them along. Making sure that only serious, qualified prospective Buyers get to meet and talk with the Seller.
• The Seller may be required to provide ad-hoc ancillary reports. Mostly accounting type data or answer questions.
• The Seller will be required to meet with prospective Buyers (1:1, duration and frequency is variable and will be based on seriousness of Buyer and comfort of the Seller).
Receive a Letter of Intent (LOI) to Proceed
The prospective Buyer will issue a LOI. The Seller will be required to negotiate and accept the LOI terms (Review by Sellers' legal counsel is mandatory. ) The typical LOI would contain terms about the deal, payment schedules, vendor notes and post transaction employment / contracts, but it can have all kinds of terms and considerations that will form the basic terms of the future transaction.
Accepting an LOI is certainly a significant go/no go point in the process. The Seller gets to make the final determination at this stage.
2-4 Months Buyer Due Diligence Process (This is a fairly intense period of time )
• The Buyer will provide a list of expected items that they wish to review.
• The Seller will need to work diligently and expeditiously to respond and provide this information in a timely manner. Responses could be piecemeal over a few weeks. This for most sellers is the hardest part of the work required since there could be considerable asks, lots of documents to gather and create and lots of meetings to review and discuss.
• Depending on the answers to the above there could be further requests, conversations and meetings.
• The Intermediary will assist you during this period. But this is largely dependent on the information request, and what role the seller would like the Intermediary to play and what access to information would be provided to the Intermediary.
4-6 Weeks Legal Process (Time required to read & review docs)
• Legal begins once Due Diligence completes and this typically lasts a 4-6 weeks or more. The variability depends on the legal complexity and detailed Seller & Buyer review of clauses and specific wording.
• Emotions will be running high at this point, so patience is required if you really want the deal to close!
Deal Done! Total elapsed time from start to end: 8-12 months but most of the Seller effort was during the Due Diligence phase.
Exercise - Questions
What would be your ideal timeline for starting the process to completely exiting with you having no further involvement with the business?
Is it realistic?
Why is this your ideal timeline?
What about the above timeline do you think does not fit with your personal situation?
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