Private, high-growth companies driven by or selling technology, often start up, proceed through several financing rounds and are ready for exit via a merger or stock or asset sale within a matter of a few years from inception. Others take longer and a few companies are appropriate for and able to execute an initial public offering. In any event, the vast majority of companies deciding to exit choose to seek stockholder liquidity through some sort of merger or acquisition transaction (“Sale Transaction”). These transactions routinely take three-to-nine+ months to go through preparation, initial auction, letter of intent, due diligence, documentation and closing processes. Preparation should occur months before commencing active solicitation of a buyer.

This post will outline the most basic steps to preparing a company (“Company”) for a Sale Transaction that will withstand buyer’s due diligence. These steps, however, will vary depending on the Company’s industry and the business model. Software and IT will differ from health care, medical devices and business services. Social media will differ from advanced manufacturing, and so forth. Importantly, business-to-consumer models will differ from business-to-business models. Having said this, please take note of the following general suggestions.

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