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Angels, Dragons and Vultures: How to Tame Your Investors And Not Lose Your Company by Simon Acland

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TRADE SALE

A trade sale brings you closer to an exit than an IPO, so let’s start with that first. And you may still be worrying about why a trade sale is not an immediate exit for you, so let’s put you out of your misery.

In a trade sale, another business, typically a larger one, buys yours. You receive an amount of cash which you put into your bank account. Surely that’s an exit? To the extent that you have received money, yes it is. But you are likely to have an obligation to continue working in the business for a certain period, maybe a year, maybe two, perhaps even longer. You may be due future payments linked to your continued employment. All or some of that may also depend on the performance of the business going forward.

When you sell ...

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