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Selling A Business: Top Ten Tips For Entrepreneurs | 4 entrepreneur

4. Run the Negotiations Through the Lawyers. The entrepreneur should do what he does best ? i.e., build companies ? and leave the negotiating to a strong corporate lawyer. Entrepreneurs are generally no match for sophisticated venture capitalists or private equity or corporate development guys who do deals for a living. Accordingly, a smart entrepreneur will stay above the fray and let his corporate lawyer run the deal. The Big Boys may try to do an end-run around the entrepreneur?s lawyer (and may even criticize the lawyer and try to turn the entrepreneur against him), but the entrepreneur should remain disciplined and avoid ?side-bar? negotiations with the principal(s) on the other side. This approach is particularly important where the entrepreneur will have an ongoing relationship with the other side post-closing; the goal is thus not to poison that relationship with testy, acrimonious negotiations (i.e., let the lawyers fight it out).

10. Hire an Aggressive Corporate Lawyer to Watch Your Back. As a corporate lawyer at two major New York law firms, I have learned first-hand the importance of watching my clients? back. Indeed, I have worked on billion-dollar deals where, prior to signing, emotions run high (as discussed above), and a few of the significant risks are minimized or pushed-aside by investment bankers and/or business guys in order to get the deals done. My job, probably more important than anything, is to sober the entrepreneur and lay-out all of the significant legal risks ? and then push hard to negotiate appropriate protections. If the deal sours and lawsuits are filed, well-drafted documents become like an insurance policy to the entrepreneur ? and what entrepreneur doesn?t have insurance?

Full post as published by Indiana Civil & Business Lawyer on July 17, 2008 (boomark / email).