The Tough Terms of Selling a Tech Company

Published on October 13, 2010
by Pui-Wing Tam

Selling a closely held tech company these days is no picnic–especially after the sale of the firm has already closed.

That’s the message according to a new study by Shareholder Representative Services LLC, which manages the post-closing process in M&A transactions of private companies. SRS based its study on more than 100 transactions that it was involved with recently. Most of the deals ranged between $25 million to upwards of $200 million in size, largely in tech sectors such as software, electronics and telecommunications.

According to the study, which SRS is releasing Wednesday, the post-closing period of a private company sale is long and arduous, with claims over the deal able to filed over an extended period, and more conditions such as performance hurdles that have to be met before shareholders in the closely held company can fully cash out.

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