You’ve worked hard, probably for years, to build your business. Sweat equity, tears, gut-wrenching decisions, and more missed family celebrations than you care to admit. Now you’re thinking about selling, and this is not the time to take shortcuts. A Harvard Business Review report finds that 70% to 90% of M&A transactions fail, usually because buyers and sellers take shortcuts during the evaluation process. The Read More

What Is An Acqui-Hire? The purpose of a typical merger or acquisition is to acquire the customer base and other assets of the target company. However, in certain cases — and in certain industries in particular — companies are acquired exclusively for their labor talent. This type of transaction has come to be known as an “acqui-hire,” and technology companies in Silicon Valley have been utilizing this quasi-hiring Read More

Rarely do private company owners sell their companies, pocket all the cash at closing, and ride off into the sunset to never worry about their business again. Selling owners and key employees of acquired private companies almost always both play a crucial post-closing role in the 2-to-5-year period after the initial sale. The buyer (particularly any private equity buyer) will lean heavily on selling owners and Read More

Representations and warranties (R&W) insurance, once reserved for public company and higher-market mergers and acquisitions, is becoming more prevalent in lower middle-market private company M&A transactions. Recent trends show that R&W insurance, which provides liability coverage for breaches of representations and warranties made by a seller in an M&A deal, is now being used in an estimated 25% of Read More

Successful M&A deals don’t just happen by accident. Each M&A transaction has its own complexities and numerous factors must converge to result in a mutually beneficial outcome for both the buyer and seller. Sellers who are willing to critically analyze a deal objectively and possess the gravitas to have tough conversations with buyers stand the best chance of obtaining an optimal outcome for themselves and Read More

Congress finally reached agreement and passed on December 21, 2020 a $900 billion economic stimulus bill, which was signed into law by the President on December 27, 2020. Among other things, the bill expands and clarifies the Paycheck Protection Program (“PPP”), as amended, which was originally passed under the Coronavirus Aid, Relief, and Economic Security Act (CARES) on March 27, 2020: Expands the PPP to Read More

Planning for the most favorable tax treatment on their investment is always a major consideration for investors. Because of a renewed interest in using C corporations as investment vehicles as a result of the reduction to the corporate tax rate to 21% under the Tax Cuts and Jobs Act of 2017, investors have shown a renewed interest in the potential tax benefits under Section 1202 of the Internal Revenue Code (IRC), Read More

Venture capital firms and other equity investors commonly request the right to have an observer attend the board of director meetings of their portfolio companies. A board observer isn’t a director, and therefore doesn’t have voting rights, generally doesn’t have a fiduciary obligation to the company or its shareholders, and typically doesn’t have the same right to indemnification to the same extent as actual members Read More

When seeking investors, entrepreneurs and business owners may be approached by individuals, including friends and family, who do not qualify as “accredited investors” under securities laws. Depending on where a business is in its lifecycle, accepting funds from these types of individuals may range from appealing to essential, or a business owner may simply desire to include them in the investment opportunity. Read More

You’re ready to sell your business or bring on a major investor, have hired a knowledgeable investment banker to manage the process, and now you’re entertaining one or more offers from interested private equity (PE) firms. Choosing the right PE partner is one of the most critical decisions for any founder or CEO, and the relationship will be for the long haul. Before you sign up for the highest valuation offered, Read More