Selling the Intangible Company: How to Negotiate and Capture the Value of a Growth Firm (Wiley Finance) [Hardcover]

Thomas Metz (Author)

Book Description

Series: Wiley Finance | Publication Date: November 24, 2008

In Selling the Intangible Company, Thomas Metz helps entrepreneurs and venture capitalists to better understand the process of selling a company whose value is strategic. He addresses all the key issues surrounding the sale of a company in which the value is in its technology, its software, and its know-how–but has not yet shown up on its balance sheet. Filled with in-depth insights and expert advice, this book provides essential information for business professionals and technology CEOs who need to understand the nuances of selling a company with intangible value.

Editorial Reviews

From the Inside Flap

Companies with strategic value—as opposed to financial value—exist in a variety of industries, but they're predominantly found in today's ever-growing technology, software, and service industries. Almost every one of these businesses will transfer ownership at some point in time, the vast majority through an outright sale of the company. But those responsible for handling transactions involving companies with intangible value are often faced with a number of hard questions: How will the buyer perceive value? In which sectors can the best buyers be found? Can the right investment banker add value to the transaction?

In Selling the Intangible Company, Thomas Metz helps entrepreneurs and venture capitalists to better understand the process and nuances of selling a company whose value is strategic. He addresses all the key issues surrounding the sale of a company in which the value is in its technology, its software, and its know-how—but has not yet shown up on its balance sheet.

Metz reveals the important subtleties surrounding the sale of companies whose value is strategic, such as how selling a company with strategic value is different than selling a company with financial value, and why small transactions have different dynamics than large transactions. He identifies the best time to consider selling and debunks many of the common myths surrounding the sale process. Drawing from his twenty-five years of experience in this area, Metz offers invaluable advice on negotiating the price of an intangible company, identifies common negotiating mistakes, and examines the pros and cons of the sale of stock versus a sale of assets. He also looks at transaction currency alternatives and how creative structuring can overcome unusual deal problems. In addition, he tells how to select an investment banker, attorney, and accountant—and explains why a CEO should not sell the company himself.

Deals such as these can be a complex, sometimes perplexing process. Selling the Intangible Company provides the essential information necessary for business professionals and technology CEOs who need to understand the nuances of selling a company with intangible value.

From the Back Cover

Praise for Selling The Intangible Company

"Tom Metz brings a world of common sense and practical expertise to an area where it is desperately needed. Untold wealth and value are wasted repeatedly through buyers and sellers misunderstanding the nature of strategic value and how it translates into not only sales price, but company disposition. If you are entering into a transaction of this sort, you must read this book."
—Geoffrey Moore, author, consultant, and venture capitalist

"Tom Metz has captured the essence of deal-making, in what surely is one of the most readable texts written thus far. Every chapter would be useful for our CEOs who are capturing value by partnering or getting ready to embark on the M&A pathway, and it will be 'required reading' for our first-time CEOs. His insights and humor shine through, making this one of the more enjoyable business books available today."
—Mike Powell, General Partner, Sofinnova Ventures

"I plan to provide copies of Tom Metz's book to my CEOs, CFOs, and fellow board members requesting a discussion of it well before serious shareholder liquidity becomes a possibility. In his relatively short book, Tom has provided a very complete discussion of the important aspects of selling any company, but especially one whose value is difficult to determine."
—Jim Towne, first recruited president of Microsoft

"Mr. Metz draws on experience, creativity, process, game theory, and, most of all, empathy in guiding CEOs through the maze of techniques and myriad of paths one can follow during a sell side transaction for small tech companies."
—Anil Hansjee, Head of Corporate Development, EMEA, Google

"Tom Metz has always focused on deals that require creativity to complete successfully. He shows how perception can be more important than analysis and how extrinsic value is in the eye of the beholder. These days, M&A is the path to liquidity in the vast majority of cases and this book helps those concerned to understand the typical factors comprising the deals. Actual 'war stories' illustrate different deal scenarios."
—Peter L. Wolken, General Partner, AVI Management Partners, Los Altos Hills, California, (A Silicon Valley venture capitalist since 1979)

See all Editorial Reviews

Product Details

• Hardcover: 326 pages
• Publisher: Wiley; 1 edition (November 24, 2008)
• Language: English
• ISBN-10: 0470261374
• ISBN-13: 978-0470261378
• Product Dimensions: 9.1 x 6.1 x 1.4 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #1,829,914 in Books (See Top 100 in Books)

More About the Author

I have been a boutique investment banker with my own firm for 27 years and the primary focus has been arranging the sale of technology, software and service companies. Over the years I have interacted and negotiated with a wide range of personality types. In addition, I have encountered a variety of unusual deal problems that had to be solved before a transaction could be completed. It has been an interesting career and I never tire of meeting new and interesting people and solving new and challenging problems.

Customer Reviews

Most Helpful Customer Reviews

1 of 1 people found the following review helpful:

5.0 out of 5 stars A superb book, packed with insights you won't find elsewhere, August 11, 2010

By 

Software Company Founder (Chicago, IL) - See all my reviews

This review is from: Selling the Intangible Company: How to Negotiate and Capture the Value of a Growth Firm (Wiley Finance) (Hardcover)

As an entrepreneur, I have read several books about how to prepare a company for sale and complete the sales process. However, most of the books out there are geared towards people who are selling a traditional "mom and pop" business, such as a local restaurant or dry cleaner. And even if a book focuses on selling larger businesses, the discussion centers around mature firms where determining a valuation and finding buyers is a relatively straightforward process.

"Selling the Intangible Company" is different. The author has many years of experience in selling companies with "intangible" value. These businesses typically don't have a long history of predictable cash flows that can be used to value them by applying a multiple of earnings. Rather, their value is in their technology, products and people. For this type of firm, value depends largely on locating a buyer who has a strategic interest in acquiring what the seller has created. Because the perceptions of value can vary so widely from one potential buyer to the next, it's especially important to execute a disciplined sales process and understand things from the buyer's perspective.

This book is an excellent resource for founders and managers of small technology companies, though I can see it being valuable to innovative, non-technology firms as well. Tom's writing style is clear and authoritative, but funny and entertaining at the same time. Perhaps the strongest part of the book is the large collection of "War Stories" that the author has included. In these brief segments, Tom talks about how an actual client of his dealt with a particular opportunity or challenge. Sometimes their stories turned out well, and other times they crashed and burned. But every one of the war stories makes for a great read, and helps provide real-world examples of the many nuances that surround these types of M&A transactions.

Compared to other books on how to sell a business, "Selling the Intangible Company" is relatively expensive. However, if you fit the audience profile that I mentioned above, it's worth every penny.