Adams .Strategy
NewsPaper.2025
Many entrepreneurs devote intense attention to the sales process but less to what happens afterward. Yet the post-closing phase is critical for a successful handover and personal satisfaction.
Possible roles after the sale:
1. Full Exit (“Clean Exit”)
You leave the company entirely after signing the contract or following a brief transition period.
2. Transitional Support (“Transition Model”)
You remain on board for a limited time for example as a consultant, project manager, or interim executive.
3. Strategic Background Role
You stay strategically involved through a minority stake, an advisory board seat, or a formal mandate.
Personal questions to ask yourself:
1. Do I want to let go or stay involved?
2. What does the company need and what does my life need after the sale?
3. How can I plan my transition to present myself clearly and with a forward-looking mindset?
Selling a company is one of the most complex financial transactions. Yet many entrepreneurs underestimate the challenges and forgo professional advisors. A mistake that can prove costly. Sellers who proceed without M&A advisory risk substantial value losses.
An experienced M&A advisor helps identify the right pool of buyers, maximize company value, and avoid legal pitfalls. Especially in international deals or negotiations with private equity firms, an advisor can be crucial. The cost of advisory is often only a fraction of what can be gained through strategic negotiation.
In the context of business valuation, the EBITDA metric holds a special position. It is one of the key measures for investors, banks, and potential buyers especially in the context of company sales, equity stakes, or strategic decisions.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
Specifically, EBITDA shows how profitable a company’s core operations are without distortions from factors such as:
– Financing structure (interest),
– Individual tax burden,
– Accounting depreciation (e.g., on machinery or patents).
Investors place great value on comparability, and EBITDA enables exactly that: it provides an objective view of a company’s operational performance.
It neutralizes company-specific accounting and financing decisions that often obscure true business results.
EBITDA is calculated as follows:
Net income
+ Interest expense
+ Income taxes
+ Depreciation of tangible assets
+ Amortization of intangible assets
= EBITDA
"The more interested buyers you involve in the negotiation, the stronger your position becomes this way, you not only shape the price but also secure your company’s future."
Dr. Adams
In the context of a business sale, preparing an information memorandum is crucial. It serves as the foundation for approaching potential buyers and provides a comprehensive insight into the company’s financial situation and future prospects. The memorandum includes all relevant data such as company history, business model, financial metrics (EBITDA, revenue), and a market analysis essential factors for assessing a company’s viability. An incomplete or poorly crafted memorandum can deter potential buyers and undermine confidence in the seriousness of the sales process. Thorough, professional presentation of company data is often an indicator of a well-managed business.
Selling a company is a complex process with far-reaching financial and strategic consequences. Those who fail to prepare early risk leaving value on the table or getting caught in difficult negotiations. But what really matters?
1. Proper preparation determines success
A well-prepared sale often achieves valuations 20–30% higher. Cleaning up finances early, structuring contracts, and presenting clear growth strategies make you more attractive to buyers. An unstructured process, on the other hand, can drive investors away or lead to worse terms.
2. Choosing the right buyer is crucial
Not every buyer is suitable. Strategic buyers often pay higher prices than financial investors because they can realize synergies. At the same time, a private equity fund may offer other advantages, such as a long-term growth perspective with the founder on board. Key point: don’t commit to the first interested party! Experts recommend negotiating with at least three potential buyers to maintain optimal leverage.
3. Price isn’t everything contract details matter
A high purchase price can be misleading if the contractual terms are unfavorable. Earn-out provisions, non-compete clauses, or liability clauses can significantly affect the actual proceeds. Many sellers overlook clauses that carry long-term financial downsides. A thorough review of contract details is therefore essential.
4. Avoid tax and legal pitfalls
A company sale can have tax implications that drastically reduce net proceeds. Asset deal or share deal? Holding structure or direct sale? These questions should be resolved early with experts to find tax-optimized solutions. Additionally, employee rights, existing contracts, and liability issues are critical topics to review before closing. Oversights here can lead to high risks or delays.
5. A professional sale process increases company value
The best strategy is a structured sale process with a clear timeline, a compelling information memorandum, and targeted buyer marketing. An experienced M&A advisor can be decisive here. Many companies sell for less than their value because they are not positioned professionally in the market.
Conclusion: Well-planned is half-sold
A company sale is not a quick fix. Those who prepare early, compare multiple buyers, and optimize contract details can secure the best possible deal both financially and strategically.
Selling your company should be the culmination of years of hard work, yet this process often proves to be a disillusioning experience rather than a triumphant event. For example, the calculated sale price may fall short of retirement expectations or a buyer’s promises may go unfulfilled. Entrepreneurs risk overlooking common pitfalls that are easily avoided. Below are the three most frequent traps.
First, inadequate preparation. A recurring mistake in the sales process is incomplete or unstructured (financial) documentation. In company sales, transparency is essential to capture the full complexity of the business for sale and, based on past performance, to develop forecasts for the future. Poor preparation can deter potential investors or lead to deep discounts or large portions of the purchase price being deferred. Although earn-outs are not inherently negative, sellers who typically exit after three years usually have no control over the deferred payments.
Second, misjudging the company’s market value. Accurately valuing the business is critical to a successful sale. Owners of small and medium-sized enterprises often overestimate their life’s work due to emotional attachment built over years or decades, the company becomes part of their identity. This emotional bias can lead to overvaluation, which signals red flags to investors. Potential buyers may not even conduct an initial review or discussion, substantially prolonging the process.
At the same time, the seller’s advancing age increases time pressure. The sale process drags on, negotiating positions weaken, and a sale below fair value often results. To avoid this scenario, we recommend an early, professional valuation by independent experts to develop realistic price expectations and pave the way for a successful sale.
Finally, succession planning is frequently overlooked. Entrepreneurs are often so involved in day-to-day operations that the business depends heavily on them personally. This reliance reduces attractiveness to buyers especially when clear structures, documented processes, or a capable second management team are lacking. Investors demand continuity without the current owner; absence of documented workflows, role descriptions, or a thorough handover (e.g., via SOPs) leads to further discounts due to increased risk. For a successful sale, it is essential to build a robust second-tier leadership and clear succession scenarios well in advance.
"He who negotiates with only one buyer does not sell he hopes."
www.adamsstrategy.de"Succession is not a farewell it is the next chapter in a company’s story."
www.adamsstrategy.de
Startups continue to play a central role in the innovation landscape. However, given today’s economic climate marked by inflationary pressure, rising interest rates, and tighter capital availability investors’ expectations have shifted. A great business idea alone is no longer enough to secure funding.
1. Substance and Scalability Matter
Potential investors place high value on robust business models with clear scalability, realistic financial projections, and strong market positioning. Those seeking capital must demonstrate that growth is not only possible but sustainably fundable. Startups with recurring revenue models are especially in demand they provide predictability, reduce risk, and build investor confidence.
2. A Strong Founding Team Counts More Than the Idea
When courting investors, the team often matters more than the product itself. Startup investors invest in people, not just business models. A resilient founding team with defined roles and operational experience is a key success factor. This doesn’t disadvantage first-time founders what matters is that the team is passionate about the idea, believes in the product or service, and stays open to adapting the business model to changing market conditions. This blend of conviction and agility makes a team particularly attractive to investors.
3. Preparation Is the Key to Success
To convince investors, you must be well prepared. This includes:
– A solid business plan with a three- to five-year outlook
– Transparent, realistic financial projections
– A well-thought-out exit strategy
Without this preparation, you risk rejections or accepting inferior terms in the event of an offer.
4. The “Cash-and-Dash” Model? No, Thank You.
The old notion of “sell, cash out, and disappear” no longer reflects the reality of the investor market especially in the startup segment. Startup investors expect ongoing involvement post-closing, including support during the transition, strategic collaboration, and active contribution to the company’s growth. In today’s business world, demonstrating both financial acumen and a willingness to share responsibility is essential.
Many entrepreneurs make the mistake of committing too early to a single buyer when selling their company. This carries risks: if the deal falls through, there is no Plan B time and value are lost. It’s better to negotiate with at least three interested parties. That competition drives up the purchase price and improves contract terms. In a bidding process, you can secure not only higher prices but also better conditions. More buyers mean more options, greater negotiating leverage and ultimately a better deal.
Many entrepreneurs wonder if they can handle the company sale with just their tax advisor. The answer is: no not entirely. A tax advisor can manage tax issues and accounting, but the complex negotiation processes and strategic aspects of a sale require M&A expertise. Tax advisors are indispensable for tax optimization and bookkeeping matters. However, strategic positioning, identifying potential buyers, and leading negotiations belong in the hands of experienced M&A advisors.
"In the end, it’s not just about a company it’s about a lifelong achievement and the people who make it possible."
www.adamsstrategy.de
Business Sale: Why Communication Begins Only After Closing
Selling a company is a strategic milestone with far-reaching consequences for employees, customers, partners, and public perception. One aspect is particularly crucial yet often underestimated: the timing of communication.
In practice, communication happens only after closing. While trust and transparency are essential, communicating too early risks far more than uncertainty. Employees could become unsettled, customers might defect, competitors could exploit the situation, and the deal itself could be jeopardized if confidentiality is breached.
Therefore, communication follows a clear, jointly agreed plan with the buyer strategically planned and tactically precise.
1. Leadership First – Immediately After Closing
The extended leadership team is informed first. They are key multipliers who help carry the change internally. Their early involvement builds confidence especially during transition phases.
2. Transparent Employee Engagement
Next comes the workforce. This phase is about openness, guidance, and reassurance. Clear communication about what will change and what will remain the same eases fears and maintains motivation. A factual, respectful approach at eye level is crucial.
3. Targeted Communication with Business Partners
Core clients, suppliers, and strategic partners are proactively informed after internal communication. Individual conversations and personalized messages replace mass announcements. The central message: continuity, reliability and future perspective.
4. Public Relations: Controlled Rather Than Reactive
Press outreach happens last but not as an afterthought. A well-prepared communications strategy ensures public perception is not left to chance. Actively managing external messaging protects reputation and guards against speculation.
How do I protect my trade secrets during the sales process?
Selling a company requires transparency but transparency also carries risks. Especially in the early stages, you need to provide prospects with information without revealing sensitive data or proprietary secrets.
1. Confidentiality before transparency:
Before exchanging detailed documents, always have a Non-Disclosure Agreement (NDA) signed. It establishes a legal framework, protects information, and signals professionalism.
2. Phased disclosure:
Not all information needs to be shared at once. A professional M&A process proceeds in stages, with clearly defined “data packages” for each phase (teaser, information memorandum, data room).
3. Anonymization & aggregation:
In initial outreach, present key metrics, customer structures, or supplier relationships in anonymized or aggregated form. Detailed data follows later selectively and under control.
Negotiations are the most critical part of any company sale and they rarely proceed without tension. Conflicting interests, emotional attachment to one’s life’s work, and uncertainty about the future path lead to critical moments at the negotiation table.
Typical conflict areas in practice:
1. Price expectations:
Buyers value based on future opportunities and risks sellers based on past performance and build-up efforts.
2. Earn-out provisions:
When part of the purchase price depends on future success, you need clear definitions and mutual trust.
3. Transition timing:
Sellers often want a clean break, whereas buyers typically prefer a handover phase with continued involvement.
How to handle it professionally:
1. Good preparation is half the solution.
Knowing your numbers, risks, and strengths enables more persuasive arguments. Anticipating objections early strengthens your negotiating position significantly.
2. Use neutral moderation.
An experienced M&A advisor acts not only as a technical expert but also as a buffer in tense discussions, helping channel emotions and keep focus on the goal.
3. Secure alternatives to expand leverage.
Negotiating with multiple prospects instills confidence. Simply knowing you have options strengthens your position and helps you avoid unnecessary concessions.
4. Develop understanding for the other side.
Buyers and sellers both have legitimate interests. Empathizing with the other party’s perspective often uncovers solutions that satisfy both sides. While difficult negotiation scenarios can’t be eliminated, they can be managed effectively. With structure, experience, and a cool head, even critical moments can lead to better outcomes.
"Emotions are often the silent co-negotiators at the table"
www.adamsstrategy.de
1. Do I want to fully step away or take on an advisory or strategic role?
2. What does the company need and what will my life need after the sale?
3. How do I structure my transition?
4. Which values should remain in the company even without me?
5. What will my daily life look like after the sale, both professionally and personally?
6. Is my family or close circle involved in the decision and do they understand my motivations?
7. What kind of buyer do I want professionally, personally, and culturally?
8. Am I prepared to relinquish control even if future decisions are made differently than I would?