Just a tiny bit of wisdom I picked up along the way. As always, I am not a lawyer and this is not legal advice.

If you’re selling your business, you’re going to be handed an M&A agreement. That agreement is probably going to have something like 15 pages of representations and warranties – things that you claim are true about your business. At the end of the reps and warranties, there’s going to be a penalty section. The penalty section defines what happens to you if any of the reps and warranties are found to be incorrect or if a lawsuit arises out of something that occurred before the sale of your business.

You may hire an M&A attorney. Said attorney may tell you that it’s going to take 3 weeks and many billable hours to go through the reps and warranties with a fine tooth comb. You may find yourself unwilling to pay for said attorney’s private jet, in which case I strongly recommend focusing on the penalties at the end of the reps and warranties. The more the penalties are reduced, the less the reps and warranties matter.

It’s a great indication if you find yourself on the same side of the table as your acquirer arguing with the lawyers because you’re both so excited to see the deal happen. If you don’t have that experience, then think twice about what you’re getting into.