Fact: Most entrepreneurs go through the process of selling their business only once in their lifetime. This step requires careful consideration and professional guidance. But what should you do if you receive multiple offers for your business sale?
Choosing the right buyer is one of the most critical decisions an entrepreneur must make. But what criteria should guide this choice? In the following, we will examine the key factors that should play a role in making the right decision.
#01 The importance of a professional sales process
#02 Hard Factors: The Hard Facts of Decision-Making
#03 Company valuation and purchase price
→ Payment methods have an impact on company valuation
→ Financial reporting date for company valuation
→ Guarantee catalogue should be appropriate to the assessment
→ Share deal vs. asset deal and tax perspective
→ Further collaboration
#04 Soft Factors: The soft factors that make the difference
→ “Personal fit” and fairness
→ Process speed and intensity on the buyer side
→ Continuation of the company
→ Continuation of the company
A professional sales process makes it possible to receive multiple attractive offers even in a challenging market environment. This is well illustrated by our recent client cases: By mid-2024, we advised on a sale where 9 Letters of Intent (LoIs) were received—3 were very good, 2 were good, 2 were acceptable, and 2 were less attractive. However, in the end, only one buyer could be selected.
So, how do you determine which buyer should get the deal?
"A professional sales process makes all the difference—it not only brings multiple attractive offers but also ensures that the best buyer is selected for the future of your business."
The most visible factor in a business sale is the valuation and the resulting purchase price. The question is how enterprise value (EV) is determined and whether buyers adjust their offers based on net debt, working capital adjustments, and similar financial factors.
While the purchase price is a critical factor, it should not be the only criterion for selecting a buyer.
How the sale is structured plays a central role. It is crucial to examine how much of the purchase price is fixed and how much is variable. The payment method—whether it is paid in cash, through earn-outs, seller loans, equity rollovers, or with put/call options—can significantly impact the actual value of the deal. Every detail counts, and even small differences can have a major impact.
Another key factor is the economic cut-off date, which determines from when the buyer takes over the business. This includes defining who benefits from the current year's profits and how the deal is structured. The complexity of these regulations can make a significant difference, and potential interest on deferred payments can also play a role in balancing the purchase price.
Buyers require guarantees, but what risks will the seller be liable for? The scope and type of warranties can significantly impact risk distribution in a transaction. These should be carefully reviewed to ensure fairness in the deal.
Whether a sale is structured as a Share Deal or an Asset Deal makes a significant difference, particularly from a tax perspective. The structure of the transaction directly impacts the net proceeds after taxes, so it should be carefully considered when making a decision.
Another often-overlooked aspect is the question of post-sale collaboration. How long should the transition period last, and how will it be structured? What advisory or management roles are possible for the seller? These factors can be crucial for ensuring a smooth transition and the seller’s satisfaction after the sale.
"The price is not the only factor—the buyer’s choice significantly impacts the future of your business."
A frequently underestimated factor is “personal fit”—how well the buyer and seller align in their expectations and communication. Did the buyer conduct themselves fairly and transparently throughout the process? If there are already tensions before signing the contract, it is likely that problems will continue after the sale.
The golden rule here is:
“Say what you do and do what you say!”
A strong indicator of the seriousness of an offer is how quickly and actively the buyer moves forward in the sales process. Buyers who drive the process forward with urgency and engagement demonstrate their genuine interest in the business and reduce the risk of last-minute withdrawals.
How does the buyer plan to continue and develop the company? This is particularly important for sellers who care deeply about the future of their business and its employees. A buyer with a clear vision for the company’s growth and expansion can be a valuable partner for the company’s future.
Venture Advisory Partners is a Frankfurt-based M&A advisory firm. We specialize in guiding business acquisitions, sales, and financing for mid-sized companies and growth enterprises.
Our dynamic team combines expertise from the fields of M&A, Venture Capital, and Finance.
At the heart of our work is freedom—operational, financial, and personal.
We leverage the latest sales strategies and methods to execute business transactions efficiently and profitably for all parties involved.
We support our clients from initial financing to a successful business sale. Through business acquisitions, we enable individuals to enter entrepreneurship under secure conditions.
Find out how we can accelerate your financing and optimize your company sale.
