According to data from a Harvard Business School publication, only 16% of signed letters of intent to buy a company in the US result in closed deals. The remaining 84% of M&A deals flounder.Why? DYP Advisors, a firm specializing in corporate and intellectual property law, says four due diligence mistakes are to blame:1. Site sellers failing to do due diligence on the would-be buyer’s operations, cultural “fit” and finances.2. Sellers who haven’t prepped their internal accounting and legal records properly prior to a sale.3. Sellers who hide key information from would-be buyers.4. Sellers who reveal company secrets to buyers before checking with their lawyer about what’s OK to reveal.Having sold a membership site myself in 2007 and evaluated buying several others since, I can tell you that mistake number two (failure to prep internal records) is the biggest hurdle for small-mid-sized business owners. You’re so busy running your site that you never have time to clean up the paperwork mess. BTW: How much is your membership or subscription site really worth if you want to sell it to another publisher? Check out our sister site’s special report on site valuations here.
Why Up to 84% of Membership Site Acquisition Deals May Fall Through
According to data from a Harvard Business School publication, only 16% of signed letters of intent to buy a company in the US result
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