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3 companies looking to acquire my business and I feel lost. (alien.top)

submitted 11 months ago by spiderpigparty@alien.top to c/entrepreneur@indiehackers.space

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Hi everyone,

31 years old, no kids.

I own a small business, and have received offers in the region of £750k. Plus cash in the business would give me a total equity value of around £900k on exit.

I started it 5 years ago now, with the dream that one day it could be sold. Well that day has come and I’m in a very fortunate position of having 3 companies submitting offers.

But, instead of feeling excitement, I feel a sense of dread that I’m doing the wrong thing. This business has been everything for me for 5 years. At points I have genuinely thought it would end up killing me and through the toughest days and weeks the thought of the end goal was often what kept me going. So not to be feeling a huge rush of excitement and relief right now is a surprise to me.

I have 2 options.

Exit the business and take the money. in this situation I would invest the profits in property and lead a considerably lower stress, yet comfortable lifestyle.
The second option is reinvest our profits and try and take it to the next level. This would invoicing recruiting, advertisement and investment in our general operations. I’d be committing to another 2 - 5 years and going back in balls deep. Obviously the risk here is we dramatically lower our profitability by doing so and fail to scale any further. I worry we may then miss what could be a once in a lifetime opportunity to sell a business for decent money.

Not really sure what I’m expecting to get by posting this, but if anyone has thoughts or has sold a business themselves, did you experience this? Did you regret it post sale? All advice appreciated.

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[–] rzrcpl@alien.top 1 points 11 months ago

Yes. The dividends will be a source of passive income, and the shares are an asset that can potentially appreciate in time and be sold in the future. Additionally, OP mentions a strong emotional connection with his company, and the 15% allows him a continued connection with it. As a shareholder, he could even be presented with an opportunity to buy back the business at some point in the future.

In this negotiation, it’s important to be careful about establishing terms in the shareholders agreement that will allow for the desired outcomes, such as facilitating for dividends to be distributed every year (maybe even requiring it when certain conditions are met), and that OP can sell his shares freely if he desires to do so. Perhaps negotiate a board seat so he can continue to have a voice in the future of the business, insert drag along and tag along clauses, right of first refusal, etc. The shares alone are valuable, but the terms in the shareholders agreement make them more (or less) so.