Library topic
Preparing to sell
What an Indian business owner can put in order before a buyer or investor looks: the numbers, the contracts, the people and the paperwork, and how long each takes.
6 pieces
- Preparing your business for sale in IndiaGuide · 6 minMost sale processes slow down because of things the owner could have fixed a year earlier: messy records, unsigned contracts, a business that depends on one person. Most of these can be put in order within a year, if you start early and work in the right sequence.
- NDA basics before you share deal informationGuide · 5 minThe first document in almost every deal is a non disclosure agreement, and it is often signed in a hurry. A handful of clauses, and a plan to share information in stages, decide how well it protects you.
- Fundraising readiness before a Series AGuide · 5 minSeries A investors look harder than seed investors did. A founder in India should put the numbers, cap table, legal records and data room in order three to six months before raising.
- Information memorandum basicsGuide · 7 minThe information memorandum is the first long look a buyer gets at your business. It goes only to buyers under NDA, says far more than the teaser, and has to be accurate enough to survive diligence.
- Building a buyer listGuide · 6 minA good buyer list is short, reasoned and approached in order. Rank strategic buyers, financial investors and insiders by fit and risk, then approach them in waves to keep the sale confidential.
Terms to know
The words you will hear on this part of a deal.
- Normalised earnings
- Profit adjusted for one time items and for costs that will not continue after the deal, such as a promoter's personal expenses.
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- Quality of earnings
- A review of how real, repeatable and cash backed a company's reported profit is.
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- Related party transaction
- A transaction with a person or company connected to the owners or managers, such as rent paid to a promoter's family company.
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- Information memorandum
- A document describing the business for serious buyers or investors after they sign an NDA: history, market, operations, numbers and the opportunity.
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- Teaser
- A one or two page anonymous summary of a business sent to possible buyers before an NDA.
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- Sell side mandate
- An adviser's appointment to run the sale of a business or a stake for its owners.
Next step
Working through this on a live deal? Talk it over with an adviser.
A thirty minute confidential call with an adviser. You leave with the steps, the documents you will need and where the risks usually sit.