Types of Sellers
Definition - What does Types of Sellers mean?
A proactive seller would prepare the business for sale well before an actual sale occurs. This preparation would include adding management and systems, so that the owner is able to exit quickly once the sale occurs. A reactive seller is not prepared, but rather is forced into a sale sometimes unexpectedly due to one of the "5 D's" - death, divorce, disability, disenchantment, or desperation. In contrast, a strategic seller is one that may have been a bit proactive, certainly is not subject to the 5 D's, but rather requires additional capital or managerial expertise to continue growing the business.
Divestopedia explains Types of Sellers
A strategic seller may be more willing to take non-cash consideration such as equity in the acquirer, because he/she will remain responsible for growing the company with supporting capital and management from the buyer. Financial buyers such as private equity firms are better suited to partner with strategic sellers, because the objective is to grow the company further and monetize at a higher valuation in the future.
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