At Corum, we believe in the power of competition and the open market. What is a business worth? What a willing buyer will pay a willing seller is the classic answer. But, there may be a company in another state or another country (a very practical possibility for a software business) that would offer more. If you are selling your house, would you restrict the buyers you consider to those who live locally, ignoring out-of-towners? Would you only consider the first person who came along? Of course not.


Furthermore, if several companies are competing with each other then they will be motivated to offer as much as they can. Without that competition there is no incentive for them to up their offer.


Corum believes that a global competitive auction is the way to ensure that you get the optimum deal for your business.


But then, what about the early bid that comes in, take it or lose it? This tactic is used to push you to accept an offer before you can test it against the broader market. Be cautious. If the bidder is really interested in you, then they will be willing to wait whilst you solicit interest from others. If they are not, then I would question whether they are likely to be the best bidder otherwise why are they avoiding the competitive test of their bid? Normally an early bid is an attempt to get a deal at a discount to your full value.


There can be seemingly compelling reasons why the bidder needs an urgent response. Think through the tactics carefully. The buyer needs a quick decision from the seller because the buyer is making a buy-or-build decision and this cannot wait. OK, there appears to be logic as to why the buyer needs a quick decision, but the basis on which they will be valuing the business has nothing to do with your strategic value; it does not take into account any of your market traction it will simply be a comparison with what it would cost for the buyer to develop the software.


In most cases the biggest way to destroy value is to only speak to one potential buyer.