A conversation with Beat Arbenz and Thierry Barbey on seller-side M&A

Selling a company is often described as an “exit.” That sounds clean. Almost too clean.

In reality, selling a business is rarely a single event. It is a process that tests the company’s strategy, numbers, contracts, governance, people, and emotional readiness. The best deals are usually not the ones where a buyer simply appears with a high number. They are the ones where the seller understands what they are selling, why it is valuable, who should care, and what needs to be fixed before due diligence begins.

Selling a company is never just about finding a buyer. Beat Arbenz and Thierry Barbey sat down to discuss what really matters before and during a seller-side M&A process, from valuation and buyer strategy to legal readiness and negotiation leverage.

“A good sale starts before the company is for sale.”

Beat:

Many entrepreneurs start thinking about M&A when they receive an inbound message from a potential buyer. It could be a competitor, a strategic investor, a private equity platform, or a larger corporate that wants access to their technology, customers, team, or market position.

That is flattering, but it is also dangerous. If you react too quickly, the buyer defines the process. They ask the questions, they frame the valuation, they set the timeline, and they create the pressure.

A seller should step back and ask: Are we actually ready to sell? What are the alternatives? Who else could be interested? What is the equity story? What are the numbers saying? And what would make the company more valuable in six, twelve, or eighteen months?

The best sale processes start with preparation, not with negotiation.

Thierry:

Legally, that preparation matters just as much. Before any serious buyer sees documents, the company should understand its own legal house. Who owns the shares? Are there investor consent rights? Are there drag-along or tag-along rights? Are IP rights properly assigned to the company? Do key customer contracts contain change-of-control clauses? Are employee participation plans clean? Are there unresolved disputes, tax topics, data protection issues, or regulatory questions?

These are not technical details for later. They influence price, deal structure, warranties, indemnities, escrow, closing conditions, and sometimes whether the deal happens at all.

The first question is not “What is my company worth?”

Beat:

Valuation is important, of course. But sellers often jump to the number too early. The future strategy and culture of the buyer are equally important as the price.

A clear separation of the enterprise value and the share price value is very important to understand the net proceeds to the current owners.

The real starting point is understanding the buyer logic. A financial buyer looks at cash flows, growth potential, leverage capacity, and exit optionality. A strategic buyer may pay for synergies, market access, technology, talent, product expansion, or speed. A competitor may value the customer base. A corporate may value the capability because building it internally would take too long.

So when a founder asks, “What multiple can I get?”, the honest answer is: it depends on who the buyer is and what problem the company solves for them.

A strong sell-side process builds a clear equity story. It explains why the company matters, why now is the right moment, and why the buyer should act.

Thierry:

And the legal structure must support that story. For example, if the value is in software, patents, industrial know-how, or data, the buyer will check whether the company actually owns or controls those assets. If key technology was developed by contractors, research partners, universities, or former employees, the paper trail matters.

The same is true for commercial contracts. If 40 percent of revenue comes from one enterprise customer, the buyer will review the contract carefully. Can it be terminated easily? Is it assignable? Are there exclusivity clauses? Are margins protected? Are there liability caps?

The business story and the legal story need to match.

Scenario 1: The founder with one interested buyer

A founder receives a message from a larger European player: “We like what you are building. Would you be open to talking?”

Beat:

This is common. The mistake is to treat the first interested buyer as the market. One buyer is not a market. It is a data point.

If there is real interest from one party, there may be interest from others. You may also want to quietly map other potential buyers. Competition in a process does not only affect price. It affects behavior and, therefore, speed and priority-setting. Buyers move differently when they know they are not alone.

Thierry:

This is where confidentiality, process discipline, and exclusivity matter. Founders should think carefully about who gets access, how sensitive information is protected, and whether exclusivity is being granted too early.

Scenario 2: The family-owned SME with succession pressure

A profitable company has been built over decades. The next generation does not want to take over. The owner wants a responsible sale, not just the highest headline price.

Beat:

This is a very different M&A process from a venture-backed startup exit. Legacy, employees, brand, location, and customer continuity often matter deeply.

A buyer will ask: What happens when the founder leaves? If the answer is unclear, the valuation suffers. Quite often, buyers ask sellers to retain a minority stake to keep the transition as smooth as possible and to share in the rewards and risks of the following years.

Thierry:

Legally, succession deals often raise practical questions around shareholder approvals, employment continuity, real estate, pension matters, tax planning, and the seller’s transition role.

The sale agreement may include an earn-out, vendor loan, escrow, non-compete, consulting arrangement, or phased handover. These mechanisms can work well, but they need to be drafted carefully.

Scenario 3: The startup with strong tech but messy structure

A startup has valuable technology and strong inbound interest from a corporate buyer. But the cap table includes early angels, SAFEs or convertible loans, advisor shares, an employee plan, and a founder who has already left.

Beat:

From a business perspective, this can still be a very attractive company. But complexity slows the process. Buyers dislike uncertainty.

If the cap table is unclear, financial reporting is inconsistent, or the growth story is not backed by numbers, the seller loses momentum and, most likely, no deal will materialize.

This is why I like to prepare a company as if due diligence starts tomorrow. Not because it will, but because readiness creates options.

Thierry:

In startup exits, the legal issues often sit exactly where the value sits: IP, cap table, founder vesting, employee participation, investor rights, commercial contracts, and data.

If these are not clean, they can trigger renegotiation, conditions, holdbacks, indemnities, or price reductions. The earlier you identify these issues, the more calmly you can solve them.

The Letter of Intent is not “just a first step”

Beat:

The LOI is where the deal starts to take shape: valuation, structure, timing, due diligence, exclusivity, financing assumptions, management role, and sometimes earn-out logic. A good and clear LOI helps a lot for later negotiations.   

Founders sometimes think: “It is non-binding, we can fix things later.” That is partly true, but not how deals behave in practice. Once something is written into the LOI, it becomes the psychological anchor. Deviations from the LOI are difficult unless there is a clear reason for the adjustment.

Thierry:

Exactly. Certain parts of the LOI are often binding, such as confidentiality, exclusivity, governing law, costs, and sometimes break-up arrangements. Even non-binding commercial terms influence the final SPA.

This is why legal and business advice should not be separated. If Beat is negotiating the business logic and I later see legal consequences that were already baked into the LOI, we are late. The better approach is to shape the terms together from the beginning.

What sellers should prepare before going to market

Beat:

I would focus on five things:

• First, the equity story. Why should someone buy this company?

• Second, the numbers. Historical financials, EBITDA, recurring revenue, margin development, working capital, customer concentration, pipeline, and realistic forecasts.

• Third, the buyer universe. Strategic buyers, financial buyers, international buyers, competitors, suppliers, customers, and sometimes family offices.

• Fourth, the process. Who gets contacted, when, with what material, and under which rules?

• Fifth, internal readiness. Is management aligned? Are shareholders aligned? Are expectations realistic?

  
  

Thierry:

From the legal side, I would add: clean cap table, signed IP assignments, updated corporate records, reviewed customer and supplier contracts, employment documentation, employee participation plans, tax topics, data protection, litigation, and regulatory matters.

The seller should not wait for the buyer to discover problems. A seller who knows the issues and has a plan is in a much stronger position than a seller who is surprised in due diligence.

The price is only one part of the deal

Beat:

A high headline price can be misleading. The structure matters.

Is it cash at closing? Is there an earn-out? Is part of the price held in escrow? Is there a vendor loan? Are there working capital adjustments? Is debt deducted? Are transaction bonuses included? What happens if revenue targets are missed?

Two offers with the same headline value can have very different risk profiles.

Thierry:

This is where the SPA becomes critical. The purchase agreement translates the deal into risk allocation.

Warranties, indemnities, disclosure, limitations of liability, survival periods, covenants, closing conditions, and post-closing obligations can materially change the economics of a transaction.

A seller should not only ask, “What do I receive?” The seller should also ask, “What risk do I keep after closing?”

Final thought: selling well means staying in control

Beat:

A company sale is one of the most important strategic moments in an entrepreneur’s life. It deserves the same level of discipline that went into building the business.

Preparation creates leverage. A clear story creates interest. A structured process creates options. And options create better outcomes.

Thierry:

From the legal side, selling well means reducing surprises. The cleaner the company, the easier it is for a buyer to trust the deal. That does not mean everything must be perfect. It means the seller understands the issues, has organized the facts, and negotiates from a position of clarity.

At Alfred, this is exactly where our business and legal setup comes together. Seller-side M&A is not only about finding a buyer. It is about preparing the company, shaping the process, protecting the seller, and getting the deal across the finish line.

Key takeaway

The essence of selling a company is simple, but not easy: know what you are selling, know who should buy it, prepare before you negotiate, and make sure the legal structure protects the business logic.

A good exit is not improvised. It is built.