Capittal's view: every decision you face when selling your company

Quick answer

Capittal's view is that selling a company is not a single decision: it is around thirty linked decisions. And that the final price is determined by the ones taken before the first offer arrives, not by the negotiation on the last day. By the time an owner sits down to discuss price with a buyer, most of the outcome is already fixed: it was fixed by the customer concentration they never corrected, the industrial unit they left inside the company, the shareholder they never spoke to and the personal expenses they never took out of the profit and loss account. This guide puts those decisions in order.

How is this guide meant to be used?

It is ordered by the point in the process, not by difficulty. First what you decide on your own, with the company still closed to outsiders. Then what you decide with your fellow shareholders and your advisers. Last, what is decided at the negotiating table and in front of the notary. Each decision has its short answer here, enough to know which way to go, and its full analysis in the Capittal's view column where an English version is available.

Am I in a position to sell, and at what price?

These decisions are taken while the company is still closed to outsiders and they are the ones that move the price most. None of them needs a buyer sitting opposite. All of them can be put right today and none of them can be put right once an offer is on the table.

When is the right time to sell and when should I wait?

The timing is set by your company, not by the market. It is worth selling when you have two or three financial years of an upward trend behind you, the customer base is diversified and you still have the energy to see the transition through. It is worth waiting when the improvement is recent and does not yet show in closed accounts. Waiting on a macroeconomic hunch almost never pays: the buyer's cycle cannot be timed. Full analysis

My last year was a bad one. Do I sell or wait?

The answer lies in the cause, not in the result. If the bad year has an identifiable, contained and already closed origin (a customer lost and replaced, a contract that went wrong, an insured loss), you sell with that year included and defend it as a normalised EBITDA adjustment, with documentation behind it. If the bad year is the first year of a trend, selling now means selling the bottom. Put it right and come back in twelve months. Full analysis

Is the valuation I have been given the price I will be paid?

No. A valuation is a technical hypothesis about the value of the company. The price is what a specific buyer agrees to pay. Between the two figures sit three filters: net financial debt and the working capital adjustments, the discounts introduced by due diligence, and the part of the price left deferred in an earn-out or a vendor loan. Full analysis

Do my personal expenses inside the company reduce the price?

They reduce the price if they are still inside when the buyer arrives. Personal expenses running through the company reduce the EBITDA on which the price is calculated. They can be recovered as a normalisation adjustment, but every adjustment has to be evidenced with an invoice and the buyer discounts the ones it cannot verify. What is clean is paid in full; what is merely explained is paid at half. Full analysis

Which mistakes reduce the price before the process even starts?

The usual four: going to market without closed, auditable accounts, without a view of your own on value, with a single buyer opposite you, and with the company hanging off one person. To those add a more expensive one: telling the story of the process badly inside your own house. All of them are corrected in the months beforehand and none of them is corrected with an offer already on the table. Full analysis

Can I sell if the company depends on me?

Yes, but you will be paid later and on more conditions. Owner dependence does not prevent a sale: it turns part of the fixed price into deferred price and lengthens how long you stay on after completion. You tackle it before going to market by documenting processes, handing key relationships to a second tier and giving the team authority and visibility. Every relationship you stop monopolising is one month less of stay-on. Full analysis

Can I sell if one customer accounts for almost half my sales?

Yes, and the way to do it is to explain the risk before the buyer finds it. High concentration does not rule the deal out: it changes the structure of the price and usually shifts part of the payment into an earn-out tied to the renewal of that customer. What decides the outcome is the quality of the contract, how long it has been running, who holds the relationship and whether the customer could replace you. Full analysis

What exactly am I selling, and who decides alongside me?

This is where the perimeter of the deal is defined and who holds a veto. These are corporate and tax decisions, not commercial ones. Almost all of them require prior steps at the commercial registry or a restructuring, so they are taken months before you sit down with a buyer.

Do I sell one hundred per cent or only part?

Sell one hundred per cent if your aim is to get out and you do not want a boss. Sell part if you believe the company will be worth considerably more in three years and you are willing to work for it with somebody else taking decisions alongside you. A partial sale is not half a sale: it is a shareholders' agreement, reinforced majorities and a second sale agreed in advance. Full analysis

What happens if one shareholder does not want to sell?

It is resolved with the articles of association and the shareholders' agreement in hand, not with conversations. Under Spanish law a minority holder with no drag-along clause can block a sale of one hundred per cent, because the buyer wants the whole of the share capital. There are three ways out: negotiate their adherence through a drag-along, buy their stake before opening the process, or sell only the majority and accept the discount. Full analysis

How is the price split between the shareholders?

By percentage of share capital only where the shareholders' agreement requires it. Without a drag-along clause, a minority shareholder who can block the sale is paid a premium for lifting that block, and that is not an abuse: it is the price of their veto. On top of that sits everything that is not share capital and must be settled in writing: shareholder loans, guarantees given by some and not by others, unequal salaries, property made available to the company. All of that is settled in writing before signing. A split argued over halfway through due diligence breaks deals that were already done. Full analysis

Do I sell the shares or the business?

Sell shares if you want a clean exit. Accept a sale of assets and liabilities only if the buyer pays for the difference. A share sale transfers the whole company, including its contingencies, which is why the buyer demands wider warranties. A sale of the business leaves the contingencies with you, carries a different tax cost and usually means renegotiating contracts and licences one by one. Full analysis

Do I sell the premises with the company or separate them first?

Separate them first, unless the buyer wants to buy them and pay market value. A property inside the company inflates the entry price, reduces the return the buyer can finance and narrows the number of candidates. Separating it and signing a market-rate lease leaves you with the asset and a recurring income. It takes time and the right tax treatment. Full analysis

Can I sell just one business line or a subsidiary?

Yes, and it is often the best deal available when part of the business is worth more to somebody else than to you. It requires preparing beforehand what almost nobody has: separate accounts for that line, identified contracts, allocated staff and a clear apportionment of shared services. Without that measurable perimeter there is no price, because the buyer cannot value what is not separated out in the numbers. Full analysis

Do I sell to a third party or hand the company to my children?

Hand it over only if there is a successor who wants the job, is capable of doing it and has the recognition of the team. All three conditions, not two. Succession without a real handover ends in a worse sale three or four years later, with the company worn down. There is a middle route: sell the majority to a financial investor and let the son or daughter carry on managing with a meaningful stake. Full analysis

Who do I work with, and who gets to see my numbers?

This section is about control of information. Every person who knows you are selling and every figure that leaves the company is a risk that cannot be undone. The sequence matters more than the content.

What am I signing with an M&A adviser, and how do I get out of it?

You are signing a sell-side mandate on an exclusive basis. What you need to read is not the success fee percentage: it is the term, the tail fee if you close after the mandate ends, the list of excluded buyers and what happens if you decide not to sell. Insist on a defined term, a retainer credited against the success fee, written termination grounds and a tail limited to buyers actually approached. Full analysis

How do I sell without the market finding out?

By releasing the information in layers and approaching buyers in waves. An NDA does not protect you on its own: it only lets you claim once the damage is done. What protects you is the buyer not yet holding the data that identifies you. Blind teaser first, name and accounts after the NDA, customer identities only under exclusivity. Full analysis

How do I stop competitors and my own staff finding out?

By keeping the internal circle to a minimum and deciding in advance who speaks. In the early stages the people who know are the owner, the adviser and, if it cannot be avoided, the finance director. The management team comes in once exclusivity is signed. The documentation is prepared outside shared systems and under a project name. If something leaks, you respond the same day and with a single voice. Full analysis

Is it dangerous to show my numbers to a competitor?

Yes, and even so the competitor is usually the one who pays best. It is managed through sequence, not trust: the direct competitor is approached last, never before you have another offer on the table, and their access is staged. Unit prices, cost breakdowns and customer names are the last thing they see. Full analysis

What do I do with an offer that arrived without my looking for it?

Neither accept it nor reject it: use it to open a process. An unsolicited offer is valuable information, because somebody has already valued you, and a price trap, because nobody competes against themselves. Ask in writing for the structure, the financing and the timetable, value the company on your own criteria, and test it against two or three more buyers before granting exclusivity. Full analysis

And what if the one offering to buy is a direct competitor?

Treat it as a request for information until they prove otherwise. Before handing over a single figure, require a reinforced NDA with non-solicitation of employees and customers, a named list of who will see the information, and an indicative price in writing. A competitor who genuinely wants to buy accepts those conditions without arguing. The one who only wants a look disappears. Full analysis

Is a search fund a serious buyer for my mid-sized company?

Yes, if the capital is committed in writing. A search fund is an individual looking for a company to run, backed by investors. Verify those investors' commitment letters, the bank financing envisaged and how much of the price is left deferred. It usually asks for fewer months of stay-on but far more intensity, because it will be managing the company personally from day one. Full analysis

Do I give one buyer exclusivity to negotiate on their own?

Yes, but at the end and with the price already set out in writing. Exclusivity is the currency you pay due diligence with, and it is only handed over once there is a letter of intent with price, structure, conditions and timetable. Grant it for a short period, with progress milestones and the right to break it if the buyer defaults. Open-ended exclusivity is a free call option on your company. Full analysis

How do I compare and defend the price?

This is where the real negotiation starts, and most owners arrive with a single tool: the headline price. It is not enough. What you compare is how much you are paid, when you are paid and with what certainty you are paid.

I have two offers. How do I know which one is genuinely better?

Compare the certain money at completion, not the headline. Put both offers in the same table: fixed price paid on signing, deferred amount and its conditions, treatment of the debt and the working capital, sums held back as security and for how long, stay-on required, and the real probability of closing given each buyer's financing. The highest offer rarely wins that table. Full analysis

The buyer wants me to finance part of the price. Do I accept?

Accept only if it raises the total price and is secured. A vendor loan means you remain a creditor of a company you no longer control, carrying a risk you do not manage. If you accept, insist on a market interest rate, a short repayment schedule, security in rem or personal guarantees, and that your debt is not subordinated to the whole of the buyer's bank financing. Full analysis

The buyer cuts the price after due diligence. What do I do?

Ask for the detail in writing and separate the genuine findings from opportunistic renegotiation. A legitimate adjustment points to a specific, quantified fact that was not in the information provided. If the finding is real, argue about the amount and the mechanism: many contingencies are covered with a retention or a specific indemnity, not by cutting the price. If there is no new finding, the answer is no. Full analysis

The buyer walks away after the letter of intent. What can I do?

Little through the courts and a great deal through the process. A letter of intent is not usually binding on price, so a claim rarely leads anywhere; what does bind are the exclusivity, the confidentiality and the agreed costs. What helps is having kept the second candidate warm and having the data room in order so you can reopen within weeks. Full analysis

Which risks do I take away with me when I sign?

These are the decisions that survive the signing. The money comes in on completion day, but the obligations you accept that day can stay with you for years. They are negotiated once and once only.

What happens to my personal guarantees?

They are not cancelled by themselves when you sell. A guarantee is a contract between you and the bank, and a change of owner of the company does not affect it. Take an inventory of every personal guarantee and surety, including those on leases, finance leases and supplier facilities, and require their express cancellation as a condition of completion. Whatever is not cancelled is replaced or held back from the price. Full analysis

Do my contracts, my lease and my bank facilities fall away on a change of control?

Some do, and you need to know which ones before you negotiate the price. Many contracts contain change-of-control clauses allowing the other side to terminate or renegotiate: credit facilities, distribution agreements, licences, concessions and leases. Review them at the start, not during due diligence. A key contract falling away is a price cut at the worst possible moment. Full analysis

Can I sell with a tax inspection or a court case open?

Yes, and the way to do it is to disclose it from the outset. A known contingency is quantified and covered with part of the price held in escrow, with a specific indemnity in the share purchase agreement, or with warranty and indemnity insurance. In Spain an inspection by the tax authority follows its own timetable, which is one more reason to put it on the table early. A contingency that surfaces in due diligence after being concealed does not get quantified: it destroys trust, and the price with it. Full analysis

And after completion?

Completion is not the end. These three decisions determine how long you carry on working, how much money actually reaches your pocket and what you do with it. They are prepared before signing, not afterwards.

How long do I have to stay in the company?

Between six months and three years, and the term is set by two things: how much the company depends on you and how much of the price is deferred. A trade buyer asks for fewer months; a fund asks for more and usually ties them to an earn-out. Negotiate the stay-on alongside the price, with separate remuneration, defined duties and an exit window that does not cause the variable price to lapse. Full analysis

From price to pocket, how much do I actually receive?

Less than the headline says, and it is worth working it out before you negotiate. From the price you have to deduct net financial debt and the working capital adjustments, the amount held in escrow, the part deferred in an earn-out or vendor loan, advisers' fees and the tax on the gain. Do that calculation with your tax adviser before you accept a structure. Full analysis

I have the money. What do I do with it?

Decide first how much you are never going to risk again. Most sellers go from wealth concentrated in a single asset they controlled to liquidity they do not know how to manage, and the first year is when mistakes are most likely. Separate your safety capital from your investment capital before you listen to the first proposal, and check your non-compete undertaking before reinvesting in your own sector. Full analysis

What is the next step?

Work through every decision in this guide and mark the ones you cannot answer today with a figure or a document. Those are your work plan for the coming months, and almost all of them sit in the first two sections: the ones taken before a buyer exists, and the ones that move the price most.

Capittal Transacciones is a boutique M&A firm focused on the mid-market, working on transactions in the approximate range of 3 to 250 million euros, with eight offices in Spain (Barcelona as head office, Madrid, Girona, Lleida, Tarragona, Palma, Zaragoza and Valencia), and part of the NRRO group. We prepare confidential valuations for owners considering a sale, with nothing leaving the firm. The partner handles every mandate personally, from the first conversation through to the signing.