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Mentor
A strategic buyer will almost always pay more for a business except for in exceedingly rare cases
Mentor
Another one that agrees with me, https://corporatefinanceinstitute.com/resources/valuation/strategic-buyer-vs-financial-buyer/
Integration plans and post transaction responsibilities, survival and limits on reps and warranties, etc. prudent to hire a transaction attorney or banker
True. But that’s if the deal is structured that way. Many founders don’t want contingent based earnout agreements because they want out. That’s why OPs question really depends on what the founders ultimate motivations and goals are. Hard to answer in a generalized way.
Key considerations should really stem from the founders motivation to sell. He or she should have a clear idea in their mind of what the biz is valued (fairly) and what they’d like to walk away with. If they have other motivations around retaining employees etc. then that’s another factor but it all stems from what the founder wants.
Need to decide reasoning for the sale. Your buyers motivation will dictate the considerations. If looking for liquidity to the founder, also look into establishing a leveraged ESOP as a strategy. That is pretty common for family business and you don’t have to introduce an outside influence. There are drawbacks also to consider because an ESOP will have to adhere to qualified plan rules and can be costly to set up properly.
If you decide to stick around, you can buy in with the PE and make a big bonus on the exit. Culture for PE is usually worse, faster pace, high expectations.