Raising money & selling companies at the end of the year

cartoon6823

People say the end of the year is a terrible time to raise money or sell a company, because “everyone’s only thinking about the holidays” and “monied people are off skiing in Aspen.”

Except, my previous company Smart Bear was sold on Dec 20, 2007. And we completed our Series C round here at WP Engine on Dec 23, 2013. And no fewer then three other companies I was previously an investor in also raised a round that closed in December of 2013.

Although it’s stressful and consumes all the hours of the day and night, I like closing at the end of the year. Why? For the same reasons that people give about why it’s a terrible idea.

Because¬†everyone with money — and the lawyers! — want to get away for the holidays, without an unfinished deal dragging into Christmas, everyone is highly motivated to get the deal done. Lawyers who might otherwise run up bills with trivial bickering become reasonable and agreeable when it might eat into a holiday get-away.

It’s a forcing function.

  • http://austinpreneur.com/ Joshua Baer

    I sold both SKYLIST and OtherInbox with a closing right at the end of December. Lots of deals get done then.

    I think the key differentiator is how hot the deal is. If it’s hot, people are motivated to get it closed. If there isn’t any other sense of urgency, it’s hard to get people to act over the holidays.

    • Brent Halliburton

      Sold Deconstruct Media on December 5, 2010. I wonder how much their motivation helped or was it my motivation to understand outcomes going into the new year greasing my mental wheels. Don’t want the forcing function to work the other way!

  • Stu

    Taxes are another incentive to get deals done in December.

    • Stu

      I raised all of my seed round before the end of 2013, and my CPA and attorney helped me explain to those investing why it would be beneficial for tax reasons to make the investment during 2013.

  • http://www.clippingpathindia.com/image-masking.html J.Shumi

    I dont know how much it is good to sell the business at the end of the year!