News & Resources
There seems to be a consensus that Canada and North America will be under tough if not recessionary times in the latter half of 2023. Having weathered the rollercoaster of the past two years, we appreciate the concern business owners are feeling as they will no doubt face yet more twists and turns in the new year.
Investments in certain private companies are inherently illiquid for shareholders. They are even more illiquid for minority shareholders who, unlike majority shareholders, are often subject to restrictive covenants that prohibit them from selling their shares without the consent of the majority shareholders.
Every entrepreneur aspires to take an idea or skillset and transform it into a highly profitable, successful business. Sometimes using external capital is necessary to achieve this goal. Although bootstrapping (i.e., using your own funds) to finance the business can work for some, many require external capital to unleash the business’ true potential.
In Canada, an accredited investor is defined under National Instrument 45-106 Prospectus and Registration Exemptions. Accredited Investors are able to purchase securities not offered under prospectus. This exemption is intended to recognize that accredited investors have the means and knowledge to protect their own interests in investment transactions.
Selling a business is a critical decision, and it's essential to explore various options to maximize value and achieve your desired outcomes. There are three external options for selling your business, reacting to an unsolicited offer, creating an auction process, or reaching out to a limited buyer list (usually strategics). Each option brings with it their pros and cons.
It is important to consider the specific dynamics of each negotiation and the unique characteristics of your business when deciding whether to provide a purchase price or wait for the buyer's offer. Assess your goals, market conditions, and seek expert advice to make an informed decision that aligns with your objectives.
