Skip to main content

sell your internet company

Books for Website Owners – October 22, 2015

By Internet Lawyer

Title: How to Sell an Internet Business (10-Minute Legal Guide Series)

Author: Mike Young, Esq.

Reason to Read:

As explained in the book, you can protect yourself when selling your Internet business by following a few simple steps. This guide helps you create a road map for maximizing your profit while reducing your risks when you sell a privately held Internet business. One of the 10-Minute Legal Guide series, you’ll be able to read the key parts of the book in about 10 minutes and know what it takes to quickly sell an Internet company the right way.

Key Quote:

“Determining the true value of your company is an art. As a privately held company, there isn’t a public market of traded shares to look at for even guesstimating what your business is worth. What you consider important about your venture may be very different than the primary reason a prospective purchaser wants to own your business.”

Sell An Internet Business: 5 Expensive Mistakes To Avoid

By Internet Lawyer, Website Lawyer, Website Legal Documents

sell an internet businessAre you ready to sell an Internet business? Here are five common mistakes entrepreneurs make that you can dodge with a little advance preparation.

Mistake #1 – Failing to identify what you want

The day after your ecommerce company is sold, what are you looking to do with the next stage of your life?

Some sellers want to walk away and never look back. Others want to retain a role with the company they’ve just sold – as a consultant, an employee, or an informal mentor to the buyer.

Related Article – 7 Keys To Picking The Right Internet Lawyer For Your Business

If you want to stay involved with the company, how long do you plan to stay? 60 days? A year?

Answering these questions will help you structure your offer for sale so that there’s a good fit with the ultimate purchaser.

Mistake # 2 – Working for your earnout

Although it’s common for some sellers to stay on as consultants or employees for a period of time to ensure a smooth transition for the buyer, that’s different than an earnout where part of the compensation paid for your business is contingent upon future events, such as the company achieving certain post-sale milestones.

Too often, sellers will commit themselves to working for the company for one to two years without any additional compensation than the earnout.

In essence, they’ve deducted the amount of the earnout from the sale price and are working for that amount of compensation as employees or consultants for the period of time.

While that’s typically a good deal for the purchaser, it rarely makes sense for the seller when one takes into account the labor involved and lost opportunity costs.

Mistake #3 – Failing to prepare your Internet business for sale

Most ecommerce companies simply aren’t ready to be sold because their owners haven’t taken steps necessary for someone to buy.

If you have key employees and suppliers, do you have written agreements in place that ensure they remain in place if your business is sold?

Have you put in place the right legal documents to ensure you’re not violating intellectual property, spam, and privacy laws by transferring client, website visitor, and email list subscriber information to a third party?

If a letter of intent (LOI) was signed tomorrow, would you be able to provide the prospective buyer with the financial and tax information needed during the due diligence period?

Mistake #4 – Unsecured seller financing

Like the sale of brick-and-mortar companies in the offline world, sellers of Internet businesses may choose to finance part of the deal to make it happen.

However, it’s important to secure this part of the sales price with some collateral from the purchaser. Otherwise, you should assume that at some point the buyer will stop paying and it will not be financially profitable for you to pursue legal remedies for the breach when you take into account legal fees, value of your time, and the likelihood the purchaser will be unable to pay if you win in court.

Mistake #5 – Using the wrong professionals to sell an Internet business

It’s easy to find business brokers, attorneys, and accountants who can help you sell a brick-and-mortar venture. However, few of these professionals have the knowledge or experience to help you sell an Internet business without screwing up the deal.

Don’t be a guinea pig. Be sure you retain an experienced Internet lawyer and other professionals who understand Internet business and know what it takes to sell your company on your terms.

Sell Your Internet Business – Why You Should Do It Now

By Internet Lawyer, Website Lawyer, Website Legal Documents

sell your internet businessIt may make sense to sell your Internet business this year.


The stock market, housing market, and other economic bubbles appear to be on the verge of popping. In addition, federal, state, and local governments are either deep in debt or completely insolvent (bankrupt). They’re borrowing money that cannot be fully repaid even with massive tax increases.

Throw in an uncertain economy, rising healthcare costs, and growing Internet competition for even the smallest niches, and now may be the perfect time to sell your Internet company, retire, or even start over by building a new business after salting away your gains from your current company.

Related Article – 3 Things You Must Do To Sell An Internet Business Quickly

If you want to sell your Internet business, where do you find potential buyers?

  • Your competition may be looking to become larger by acquiring your online company.
  • Many downsized white collar service workers with tech skills are hunting for Internet businesses to buy using their 401k and IRA funds.
  • Internet business brokers can help you find a qualified purchaser.
  • You can do your own marketing and advertising online and offline to sell your company.

Related Article: Sell An Internet Business – 5 Expensive Mistakes To Avoid

How do you close the deal?

Like brick-and-mortar companies, there are many ways to structure the sale of an ecommerce company. Issues to discuss with your Internet lawyer include…

  1. Will you sell your online company’s assets or your equity?
  2. Do you want a lump sum at closing or multiple payments over time?
  3. Are you willing to sign a non-compete agreement if required by the purchaser?
  4. How will you keep information confidential during and after the sale process?
  5. Are you willing to stick around as a consultant to the new owner for a period of time?

Related Article: Are You Ready To Sell An Internet Business?

A experienced Internet lawyer can paper the deal for you while your accountant can work with your attorney to ensure that you get favorable tax treatment in the process.

So, what if you don’t want to sell now?

Keep plugging away.

Related Article: Buy Out Your Competition To Grow Your Internet Company

However, recognize that because of economic storm clouds on the horizon, you may have to work a lot longer just to take home the same amount of money you’d get today by selling your Internet venture and paying less taxes.