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Dealing with Investors who Want to Buy Your Business

I appreciate your interest in purchasing my business. Thank you for letting me know about your father-in-law’s role as the investor with the available funds. I am open to proceeding with the NDA, keeping in mind the confidentiality of our discussions. Let’s move forward with the understanding that this transaction will involve you and your investor.

Dealing with Investors

For small businesses, the occurrence of “investor deals” is rather infrequent. This justifies the need for rigorous screening of such deals to optimize your time investment. We strongly advise engaging directly with the investor, treating them as a genuine potential buyer – because that’s exactly what they are. Can you genuinely believe that an investor would commit substantial financial resources without scrutinizing some details about your business?

Both the investor and the buyer ought to sign the non-disclosure agreement (NDA). After all, confidential business information will be shared with the investor, making their NDA signature a logical step.

Our NDA encompasses two straightforward queries:

  1. What is your available liquid capital for business investment?
  2. What is your net worth?

Should the initial buyer lack the liquid capital or net worth required to acquire your business, are you willing to solely rely on their claim that their investor possesses the necessary funds? Granting such trust would essentially allow any buyer to circumvent scrutiny using the “I have an investor” card.

Your approach to this conversation with the buyer holds immense significance, as it sets the tone for how they will interact with you throughout the transaction. Embracing a proactive stance and demanding evidence when confronted with claims of having a private investor will establish you as a discerning and seasoned business owner.

Selling a business involves intricate dynamics, with the balance of power playing a pivotal role throughout the deal. Presenting yourself as an astute and practiced business owner is paramount throughout this process. Skillfully and diplomatically addressing the “investor issue” is key.

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