By: Mark T. Jensen

In part one of this article, Member Mark T. Jensen covered the first three tips to consider if you are selling your business. With years of experience in business transactions, the attorneys at Bowie & Jensen are dedicated to helping our clients prepare for and navigate the sale of your business. Read more below to gain additional insights.

Employees and Stockholders

Your buyer will likely identify employees that it wants to retain post-sale. Issues of job titles, reporting structure, compensation, benefits, non-competes, non-solicitation agreements, intellectual property ownership and transition mechanics will loom large and can derail a deal.

It is a good idea to identify who you believe to be your key employees that a buyer would want or need, and determine the status of each key employee’s compensation, benefits, and any post-employment restrictions they are currently obligated under.

This baseline can then be used to inform your thinking on whether or not you need to develop an incentive program to ensure the cooperation of your key employees. You will also want to think about how and when you will bring them into the transaction.

Similarly, a Buyer will want all of your equity owners (stockholders, members, partners) to sign off on a deal, and if the deal is structured as a purchase of equity, the buyer will want 100% of the equity.

You should start planning how to get all your equity owners on board as early as possible. Do you have drag along or tag-along rights in a stockholders agreement or operating agreement? What are the terms? What leverage do you have to bring people along?

As you work your way through due diligence and approach closing, you will want to have already developed a strategy for dealing with employees and equity owners. The closer you get to closing, the less leverage you have. A minority shareholder or employee holding out and not signing the deal documents can undermine a buyer’s confidence, interest and even kill a deal.

Leave Yourself an Exit

The sales process can be exciting. Discussions include the possibility of large sums of money and the final reward for all of your hard work. The buyer is flattering and the end is in sight.

There is, however, a lot of work and a long distance between the sales pitch and closing. If you are not careful, you can find yourself in a position where all of your customers, employees, and competitors know you are selling your business, possibly even some of the terms, before closing, while the buyer is pushing positions on final terms that are not acceptable to you. In this situation, you have little leverage.

You will want to work with your team of professionals to carefully create a strategy that maintains your ability to say “No” without catastrophic outcomes. This will include carefully planning how and when to provide requested information on customers, suppliers, clients, R&D projects, intellectual property, employees, new ventures, marketing plans, financial strength and other strategic and confidential information.


Selling your business is a high stakes proposition. It is complicated and can be nerve-racking. With an experienced professional team and proper planning, you can successfully navigate the complexities, lower and manage the stresses, and achieve a truly rewarding conclusion.

We have decades of experience in mergers and acquisitions across industries and are happy to answer any questions you may have. To learn more about how we can help, contact us today.

For more information, contact Mark T. Jensen at or (410) 583-2400.