EP09 Legal insights for buying or selling a business

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This recorded conversation is for informational purposes only and it is not legal advice, transmission of the conversation is not intended to create and viewing or listening does not constitute an attorney client relationship, viewers and listeners are advised to seek professional help if they are concerned about a specific legal issue.

In this episode of Acquire and Scale Show, We discuss the buying business process with Sankeetha Selvarajah, an attorney for start-up businesses.

Sankeetha Selvarajah is the Managing Attorney of Selvarajah Law P.C., a civil transactional firm located in Boston, Massachusetts with satellite offices in New York, NY. She is also the CEO of BiztoCo, a business educational platform creating profitable CEOs.

She has also worked with startups as an advisor, strategist, and reluctant therapist and outside general legal counsel to over 150 small businesses.

She is a business lawyer turned into a deal advisor in the Mergers and Acquisition (M&A) world. Her profession as a lawyer equips her to speak practical recommendations on how to acquire and run your business.

Episode Highlights:

  • Sankeetha shares her journey in the M&A world.

  • She explains her expansion as a deal advisor in investing, buying, selling ventures.

  • Sankeetha’s personal gem is Mergers and Acquisition (M&A) dealings.

  • 1st Question when buying an Online Business: Are you buying it to build or are you buying it to acquire?

  • Buying to build means having brand cohesion.

  • 2nd Question when buying an Online Business: What is your gut telling you?

  • For investments, there’s a process that must be undertaken: Asking of Questions, Consultation, Walk Through of buying a company, Sending documents to the lawyer.

  • Your service provider team is your default advisory board ( your accountant, lawyer, financial adviser, and your banker).

  • Why, why, and why do you want to buy?

  • What is the return on buying this investment in the next 3 months?

  • Sankeetha’s recommendations to buyers.

  • LOI and NDA are legal recommendations.

  • Sankeetha narrates some acquisition stories that didn’t go well.

  • Sankeetha mentions some common mistakes when buying a company.

  • Practical Tip: If you don’t understand the term, go to your service providers.

  • Recommended resource Founder’s Pocket Guide, Fair Market Value, and Book Value & EBITDA.

  • Know the different types of evaluation.

  • Protect your asset by creating a company shield.

  • Corporation gives you more flexibility for future gains.

  • What is the difference between an asset purchase and a stock purchase?

  • Lawyers are not scary; They are available always.

Tweetable Quotes:

“Everything is negotiable.”

“You should firmly be rooted in open and honest communication. It is a transactional relationship but it is still a human relationship.”

“Make friends with your service providers. Use them as tools.”

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