How to NOT Sell A Company


I have never sold a company. But I have tried to sell a company. And no one wanted to buy it.

So I cannot tell you how to get your company acquired, but I can tell you what didn’t work for me.

I learned a big lesson. I was asked to help someone sell their company. It was a company that had unique assets, a great reputation and had been around for a long time. I could see that there was value there.

But I had never sold a company before. This is something that I had seen from the acquirer’s side working on the Corporate Development team at WPP and even learned about in business school.

I knew why a company would want to acquire another company. But instead of following my first hand experience and education I got pulled into "helping" a business owner who had spent their life building their small business.  

The challenge was that the business was the business owner’s life and identity. Since it was their baby, there was a lot of emotion tied up into the company.

The owner wanted the company to be acquired for what they believed it to be worth and by a modern tech company.

So we followed a frustrating and fruitless path to no sale.

1 Look for prospective acquirers based on their acquisition history.

Instead of looking for companies whose businesses were related to the company we looked for companies with deep pockets and known for acquisitions.

Somehow I was able to connect with major companies including: Google, Amazon, Microsoft, Etsy and Intel.

The initial cold email pitch and getting the right person made that happen.

But after an initial chat, no one wanted to even learn more. There was no interest.

2 Come up with theories why these deep pocketed companies may want to buy your company.

From the list of companies we contacted you might think that I was pitching a cool tech company. I was not. To be fair it did have a tech component, but the business was primarily based on selling a collection of physical, one of a kind goods.

Coming up with a pitch for why one of these tech giants may want to purchase this company was a challenge. But we made some assumptions, which turned out to be interesting enough to talk but not enough to learn more.

Once we chatted and they and understood what it was we were selling they couldn't see the connection to their business.

We got nowhere.

3 Try to sell it for assets.

What we tried to do here is value the one of a kind collection and offer to sell those assets and tack on the proprietary technology of the company as a package.

I think that this is really what made the whole idea so uninteresting to the prospective acquirers. What were they going to do with the assets of an unrelated business and no customers or business to run? It was confusing.

I think that the best way to make a company less valuable is to sell it for its component parts. Of course at the time, I didn’t realize that. But you always see that in liquidation sales for bankruptcies: their value is essentially their balance sheet.

When I think about what a company really is, it is its customers and employees and then assets. The employees build and maintain the customer base, which brings in revenue. The assets (if what is being sold) is a means to get that revenue. The assets alone are less valuable.

4 Don’t contact competitors or related businesses.

Since this was a small business in a small industry the owner had personal reasons to not want to sell to competitors. I get that.

But I was hoping that me trying to sell it to a related business or competitor would help to buffer those feelings.

It did not. And we never contacted anyone in the industry.

I think what I learned here most of all is that there is a lot of emotion in building your own business. When it is time to move on, your emotions may get the best of you and lead you to spin your wheels wanting for an unreasonable outcome. 

What would I do next time? Avoid the rookie move of trying to help someone and let them run the plan because of their feelings. I knew what needed to be done and went along with a plan that I did not feel confident in.

Although I do understand that there is more to business than cash, in this type of situation you need to work towards optimizing your return based on something. And emotion should only be a small part of it. If your business is is part of a very small industry and it would crush your soul to sell it to your competitor, your options are just limited.

I hope my mistakes help you to learn and perhaps help you to sell your company.