Selling a Private Company? Key Points to Keep in Mind


29 minute read | January.21.2025

Privately held companies should consider a number of legal, business and financial issues when exploring a sale of the company.

In Forbes, Orrick’s Richard Smith and two co-authors provide guidance on 12 key points to consider in mergers and acquisitions (M&A) involving sales of privately held companies from the viewpoint of the seller and its management. Among other considerations, sellers should:

  • Understand that valuation is negotiable, multiple bidders can yield the best deal and that an effective legal team is essential.
  • Expect significant due diligence from possible buyers, including of financial statements and projections.
  • Consider hiring an investment banker, understand negotiation dynamics and pay attention to letters of intent and definitive merger agreements.
  • Expect a focus on IP and AI as well as people and employee benefits issues.