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Once an entrepreneur begins to consider their ideal strategic inquires, there are a number of things they can do to make themselves more appealing to potential buyers

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Though serial entrepreneur Reza Satchu has sold multiple companies – including self-storage giant StorageNow for $110-million and supply chain software provider SupplierMarket for $925-million – he firmly believes that making a successful exit from a small business should never be motivation for entering.

"The problem with thinking about an exit from day one is that it's very hard to convince employees, customers and others who have to take a massive leap of faith on you at a time when you're starting from nothing. They've got to believe you're in it for the long haul," he said.

Mr. Satchu adds that there are only three main occasions when entrepreneurs should consider making an exit: for personal reasons, such as fatigue or family commitments, when they're no longer able to keep up with their competitors and need the added resources of an acquirer, or when they believe the company is overvalued in the marketplace.

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"You know things, as the entrepreneur and owner of that business, that others don't," he says, adding that those things may include imminent threats that could hinder growth, or unreasonably high market valuation.

Whatever the reason for selling, Mr. Satchu advises against trying to court as many buyers as possible, and advises entrepreneurs to instead focus on existing partners and competitors.

"The person who can pay the most for your business is typically a strategic inquirer, someone who can see massive synergies with your business, someone who, by buying you, can substantially increase your profitability because they have certain advantages," he said. "As the entrepreneur, you know who those two or three people are."

Such was the case when Russell Glass, founder of Bizo – a B2B marketing solutions provider –sold his company to LinkedIn for $175-million this past August.

He explains that LinkedIn and Bizo had a strong working relationship prior to the acquisition, which allowed both parties to gain an understanding of the other's corporate culture.

"You want to build within gaps in the ecosystem, so you really need to be close to certain companies and understand what they're doing and how you can fill gaps in those spaces," said Mr. Glass, from the boardroom of LinkedIn's San Francisco office, where he now works as the head of B2B marketing products.

Mr. Glass adds that in doing so, entrepreneurs are able to get a sense of how those companies do business, and vice versa. In Mr. Glass's case, it didn't take long to identify the similarities between his and LinkedIn's corporate strategy.

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"Had we become a 6,000 person company, it would look at lot like (LinkedIn)," he said. "That's how great the culture fit is, and how important culture is to LinkedIn. Even our core tenets were similar, it was just a natural fit."

Like Mr. Satchu, Mr. Glass believes entrepreneurs should have a very short list of "potential fits" when considering selling the business.

"By doing so you can start form partnerships with them, solve certain problems for their customers, work with them on a regular cadence, and that's how you build an understanding of what kind of cultural fit it would be," he said. "As they're thinking about their road maps, they'll start to think of you as a potential fit as well."

Once an entrepreneur begins to consider their ideal strategic inquires, there are a number of things they can do to make themselves more appealing to potential buyers.

"You're never going to sell a really bad business, so build a great business. But the second thing is be out there and make sure people in your industry – incumbents, etc. – know about your start-up and how you think," advises Boris Wertz, founder of Vancouver-based early stage investment firm Version One Ventures and the former CEO of AbeBooks.com, which was sold to Amazon in 2008.

Mr. Wertz also advises entrepreneurs to prepare for the after-effects of an acquisition. While he was fortunate enough to see his former company continue to grow under the control of its new owners after he exited, he warns that outcomes like the ones he and Mr. Glass experienced are the exception, not the rule.

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"You don't want to see your baby, that you developed for such a long time, go sideways when someone else acquires it," he said. "It doesn't matter how much you think nothing will change with a new owner. Everything changes."

Mr. Wertz advises entrepreneurs to be very clear on whether they or not they are ready to hand the business over, and for what price, before sitting down at the negotiation table.

"Selling your business is a difficult thing, from a personal perspective," advises Mr. Satchu. "You need to think about what the other side looks like. Instead of looking at the numbers, think about what your life looks like without that business before you consider an exit."

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