Third Party Representation

Seller Representation:  For reasons outlined below and described in Sell a Business section, davidsonashe will most typically represent the Seller of a Business and only occasionally the Buyer.

To Avoid Conflict of Interest: If we were to commonly represent both buyers and sellers, sooner or later we'd find ourselves representing conflicting interests. Since we thought this would NOT be a desirable situation, we decided we had to choose one or the other, as a general policy.

To Secure Confidential Information: Confidential information is often the source and first evidence of the conflicted interest of buyer and seller. On one hand, the buyer wants information just to determine whether the business holds any real interest. On the other, the seller doesn’t want to disclose confidential information until certain the buyer is in fact interested and capable, and really a buyer, not just a looker. 

As a third party unrelated to the buyer, we are afforded access to confidential information for analytical and/or valuation purposes under agreement that it will be held in confidence unless and until there is further agreement to proceed, and that it will be thereafter disclosed in a controlled process designed to minimize exposure while addressing the legitimate interests of a potential buyer. Thus we have concluded that seller representation best facilitates the objectives of buyer and seller; that being the successful sale and purchase of the business.

Buyer Representation: Buyers do seek our assistance often, but usually not under terms of engagement or representation. We are seen as a party who may know of something or may learn of something that might be of interest to them. Most buyers don’t want or need the formal representation of a broker. Buyers want to be free to solicit help from where it can be found and to look wherever the search may lead and, usually, that makes sense, since a buyer’s need for stealth is usually not the same as it is for the seller.

Occasionally, when a buyer has a narrowly targeted search criterion, or when a specific company in is the target, or perhaps a board geographic criterion that takes us outside our own market, we may be asked to represent a buyer.

Self Representation: Many business owners will try to sell their company on their own, without representation, for a variety of reasons. That may not be most advantageous since, from the outset, the owner-seller will generally be operating from a compromised position; in particular, between confidentiality necessary to the protection of the on-going business, and the full disclosure required to equip a buyer with the knowledge and confidence to make a full fair market offer.

In addition, quantity and quality of buyer may be compromised, assuming the owner will not have the best access to pre-qualified buyers, or at least not without risking confidentiality.  Presentation and justification may be compromised, because the owner will probably never be viewed by the buyer as an objective analyst. Time and effort may be compromised between that devoted to the selling process vs. that devoted to running the business, the result of which may be compromised earnings and ultimately, a compromised selling price.