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10/17/2020
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searcher Harvard University - Harvard Business School
searcher Harvard University - Harvard Business School
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1. Is there an offer on the table, subject to DD.
2. Escrow is not a refundable deposit, the funds are under some level of structure/control. Oliver's point is correct on the terms of that escrow which is another way of saying my DD thing.
3. Have you been given the highlight to make a back of the envelope offer is there isn't one on the table?
Finally, the seller is this case thinks they are being clever and filtering our tire-kickers, however, as a ten year VC and now an Angel investor, I can tell you this is particularly short-sighted because this causes term sheets to go out with a high likelihood of not having a transaction go over the finish line particularly since you didn't have enough information to make the offer with a solid chunk of confidence it would actually close.
Right now, I'm trying to close a large round and I totally want ALL the DD out of the way so we can go from signed term sheet to legals without all the DD, thus resulting in some modification or death of the term sheet flung at me prior to the investor(s) having all the facts.
It is never black-n-white and I can tell based on over 20 plus years, the vast majority of sellers:
- Have an inflated view on what the business is worth.
- Have no clue as the the proper process.
- Take selling a business highly personal and aren't keen on you calling their baby ugly.
Good Luck.
Plenty of deals out there. Don't let them knock you off your principles.