When you’ve disclosed confidential information, is it still confidential? 

Confidentiality is an issue over which we find views crossing the spectrum of concern, from complete paranoia that anyone should learn anything about the business until they’ve made an offer, to very little concern, and no concern at all. We take the view that confidentiality does matter and that it will matter. Disregarding confidentiality threatens the value of Company.

We recommend to any owner thinking about selling the company today, tomorrow, or any other day, that the event be approached quietly. Be very careful here.  Once the bell has been rung, how do you recover the gong?

We recommend that you DO NOT float the idea past employees, suppliers, customers, competitors, or past anyone who is apt to be in touch directly or indirectly with any of these groups. Nor should you discuss the prospects with anyone who could gain from or be threatened by the knowledge. We recommend withholding any such disclosure until very late in the selling process; until the name and the face of the buyer is known and can be associated with the event.

We recommend that you don't talk to prospective buyers either, until pricing, terms and your selling strategy are fully formulated and prepared, documented and ready for release. We recommend also that you DO NOT float trial balloons or put out feelers in and around the industry, nor amongst any others that you may think to be potential buyers.

In short, bad things can and often do happen when the wrong people know, or think they know, a company is for sale, and we recommend that information never be release, indiscriminately or wistfully.

We recommend that your "Selling Strategy" be carefully calculated, developed and prepared in written detail, and thereafter, that information be released or disclosed from that preparation only under strict terms of confidentiality and only to those who have been pre-qualified and identified as having a sincere and capable buying interest. Many will be interested in looking and learning. Some may be interested in finding a steal. Fewer will be seriously interested in purchasing the Company for its full market value, but such is the interest that should be selectively identified before any disclosure is made, and disclosure should be limited to just those few.

At the same time, however, in order to ascertain the level of interest of any potential buyer, and in order to interest a serious buyer, an equally serious seller must be prepared to disclose a great deal of confidential information. An experienced buyer IS NOT going to provide a serious or committed offer to purchase for full market value without first being made privy to a great deal of confidential information. Some buyers will want access to everything immediately, and all buyers will want access to everything eventually.

At the same time, a cautious seller is going to be (and should be) reluctant to disclose such information until certain that the intent and ability of the buyer is to buy, and not just to look and learn. And, the "look and learn" concern should be heightened when the "looker" might be someone from within the industry, perhaps a competitor.

Thus, conflicting interests of the buyer and seller can and do surface very early in the process. Improper handling of this conflict will usually result in either the nullification of a good selling opportunity, or in the premature and potentially damaging disclosure of confidential information. And, while it will be important that no good selling opportunity be nullified, but be fully explored, it will be equally important to do so safely; confidentially.

Again, while this might sound like the "chicken or egg" conundrum, it is achievable. Moving the process confidentially and safely through these conflicting interests and to the desired objective will simply require competent mitigation of these conflicting interests, which is best accomplished in advance of the conflict through early and thorough pre-diligence and preparation.

For many, nothing more need be said about confidentiality. You may already understand the need of, and reasons for confidentiality. But, as was mentioned earlier, confidentiality is an issue over which we find views crossing the spectrum.