Give me six hours to chop down a tree and I will spend the first four sharpening the axe. - Abraham Lincoln
No two companies / boards are presented with the same opportunities and challenges. Determining Your unique path is critical. Once a roadmap is established, preparation is key. From the moment you make the decision to exit, the Company needs to be marketing itself and communicating expectations.
“Asymmetric information theory” proposes that an imbalance of information between buyers and sellers leads to market failure. While sellers know the value of their company, investors (and advisors) are wary and need to be convinced a company is not a ‘lemon’. Every step of the process is judged. Sadly, many companies are judged early in the process based on how they present their information, rather than on the operations of the business.
Pro-actively telling the Company’s story, delivering the right information at the right time and demonstrating trustworthiness through prompt and accurate information is key to overcoming asymmetric information and to ensure a successful sale.