Welcome to first episode of the Digital Dealmakers podcast, hosted by Kristin Jacobsen and Dominic Sullivan.
Dominic, an M&A specialist, shares his extensive experience in the deal-making space, offering a breakdown of the eight fundamental steps of the exit process. Kristin, an exit advisor and entrepreneur, discusses his personal journey of selling his online business and the lessons learned.
In This Episode
- What the podcast is about
- Why it’s worth tuning in
- Who we are
- The step-by-step process of selling an online business
- Common misconceptions & mistakes of selling an online business
- How to avoid them
Episode Details
In the expansive world of online business, selling can be a daunting but necessary step for many entrepreneurs. The inaugural episode of the Digital Deal Makers Podcast, hosted by seasoned professionals Kristin Jacobsen and Dominic Sullivan, delves deep into the intricacies of online business sales and what prospective sellers need to know. This blog post captures the essence of their discussion, offering valuable insights into key stages and considerations for any business owner preparing for an exit.
Introduction to Digital Deal Makers Podcast
The Digital Deal Makers Podcast aims to provide expert insights into online business transactions, helping you understand why selling a business isn’t just about the numbers. Hosts Kristin Jacobsen, an exit advisor, and Dominic Sullivan, an M&A specialist, draw on their extensive experience to guide listeners through processes often shrouded in mystery.
Understanding the Decision to Exit
The journey of selling begins with a personal decision to exit. Kristin shares that understanding the ‘why’ behind selling is crucial. Whether it’s a desire for lifestyle change, avoiding upcoming industry challenges, or simply burnout, clear motivations can steer the sale process effectively. Dominic emphasizes the emotional aspect often overlooked by potential sellers.
Breaking Down the Process: The Eight Steps
Dominic outlines an eight-step M&A process that typically applies to businesses regardless of size or complexity:
- Deciding to Exit: This involves determining the reasons and timing, understanding both personal and business motivations.
- Getting the Deal Live: Once the decision is made, aligning with an advisor and preparing key documents is essential.
- Circulating the Investment Memo and Initial Meetings: Introduction through an investment memorandum followed by vetting interested buyers through one-on-one meetings.
- Providing Limited Data Access: Allow buyers a glimpse into the business, ensuring transparency while protecting sensitive information.
- Receiving a Letter of Intent (LOI): This non-binding proposal indicates serious interest from a potential buyer, paving the way for deeper negotiations.
- Due Diligence Phase: Dubbed the “gray hair phase,” this step is an in-depth review involving financial, technical, and legal assessments.
- Executing the APA or SPA: Signing the asset purchase agreement (APA) or share purchase agreement (SPA) finalizes the buyer’s commitment.
- Deal Closing and Settlement: The final step involves the transfer of business assets and the release of funds, often facilitated through an escrow account.
The Critical Role of Expert Guidance
Kristin and Dominic discuss the importance of leveraging expert advisors during the selling process. While some may attempt to navigate sales independently, having expert guidance ensures a smoother process, better deal terms, and ultimately, peace of mind. Dominic shares experiences of clients who underestimated the complexities, reinforcing the value of professional support.
The Unpredictable Nature of M&A
As Dominic puts it, M&A is like a box of chocolates—you never know what you’re going to get. The process can vary significantly depending on preparation levels and the business’s operational state. Kristin advises maintaining business operations effectively throughout the selling process to avoid negatively impacting valuation and sale price.
Conclusion and Future Episodes
The podcast promises future episodes featuring interviews with sellers and buyers to further demystify the sales process. The hosts also invite feedback and questions from listeners to shape future content around community interests.
For those interested in a deeper dive into the technicalities of selling an online business, Dominic will be hosting a webinar to elaborate on the topics discussed in the podcast.
Join the Conversation
Kristin and Dominic invite listeners to share their thoughts and questions, fostering an interactive community poised to equip business owners with the knowledge and confidence to navigate their selling journey successfully. Be sure to tune in to future episodes for invaluable insights into the world of digital deal-making.
