From the Editor's Desk

How to Sell Your Business to a Competitor and Not Get Burned

Proper protection and progressive disclosure are the keys to getting the best price for your business, while minimizing the risks in case something goes wrong.

When you start to think about selling your company, there's usually two categories of buyers who show up to the table. The first are financial buyers, such as private equity firms, which are popular because they are swimming in cash, pushing up valuations, and few people want to deal with the regulatory hassle of going public when considering a larger transaction.

The second option is the strategic buyer, this is usually someone already in your market who could benefit from acquiring your complementary business. But there's another way to define a strategic buyer: it's your competitor. If you choose this option to get top dollar for your business, it means you will have to disclose strategic information to a competitor, which is scary. But what happens if you give away all that information and the deal falls through? How do you handle that?

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