Numerous entrepreneurs decide to sell their companies out of various reasons. The confidentiality of such a decision is of significant importance for the company’s market position and absolutely crucial for the entrepreneur within the company. With the sale of the company the entrepreneur often determines its future and how his life’s work will be continued. As working with a strategic investor will open up new opportunities and perspectives for the company as well as facilitate the possibility to obtain a “strategic“ purchase price, we therefore solely concentrate on identifying a strategic investor for your company.
A strategic investor acquires companies – partly or as a whole – also out of various reasons, however, the main objectives generally are to expand his own market position or to tap into new markets. Acquiring a stake in a company serves the goal to influence the company. This is quite different from the motivation of pure investment companies that are mainly ROI-driven.
Generally speaking there are strategic investors for companies of all sizes, however, not anywhere nor anytime. It is important to find the ideal window of opportunity for the commitment of a strategic investor.
But there is no such a thing as the ideal window of opportunity. After all you need to connect and match company performance, market development, market positioning, currency exchange rates and KPIs with the interest of a strategic investor.
Interests of sellers and buyers can be quite contrary – for example: the selling entrepreneur seeks his life’s work to be continued, securing the future of his company and to obtaining a good price. The strategic investor is prepared to pay a strategic – yet not too high – purchase price, as he rather invests in the future of the company than in the procurement of company shares. One entrepreneur may wish to keep influence and power, however the investor ought to take over power. Another entrepreneur seeks to quickly exit the company, however, the investor might insist on a smooth and reliable transition period.
Naturally it is important to the selling entrepreneur where an investor is coming from, i.e. from which country, what is the cultural background. We solely focus on investors from China. This is based on our personal networks but is also due to the enormous interest of the economy and politics in China to invest in German technology companies, respectively acquiring them.
The probability to successfully find a strategic Chinese partner for a German enterprise can be considered as high.
There is one essential business principle that Germany and China have in common: mutual trust in business partners. Trust must be built, however, confidentiality and discretion must be immediately guaranteed when there is the intention to sell a company. Our model to develop the cooperation with a strategic investor requires the signing of an NDA document as initial step to secure confidentiality of all negotiating parties. The NDA document must be signed by all natural and judicial parties involved in initiation and implementation of the M&A process prior to receiving information of any kind.
Here, you can download the NDA document in English, German, and Chinese. The content of all language versions is identical and they are equally applicable.
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