Email makes an Asset of us ALL
Closing should have been simple. It wasn’t.
All documents were finished. Negotiations were done. The gnarly wrestling match over working capital was concluded. The transition periods had been worked out. Extensive legal and accounting professionals had produced reams of paper and plenty of fees.
But when the day of closing dawned the Buyer learned that the sole owner of the company had permanently deleted ALL of her business emails. “Why is that important?” asked the frazzled Seller, who was expecting to attend the in-person closing and then to fly to California with her new husband.
It’s important because business emails are a business asset.
The Buyer learned of the deletion on the day of closing and was horrified. One of the reasons the Buyer was paying a premium for the company was that she believed she could do a much better job than the original founder in business development. The Buyer very much expected to mine the data in the Seller’s business email account for new business opportunities
“Suddenly, a major asset of the company had just been wiped out on the day of closing,” recalls Sharon Heaton of sbLiftOff. “It was difficult, but we saved the deal. Not the emails though. They were permanently, permanently gone girl.”
One of the things that’s hard for business owners to understand is the distinction between what’s business and what’s personal.
GovCon Sellers should be instructed that their business email account is a business asset. Potential customers contact owners via email, venders contact owners, employees contact owners – email is a wealth of relationship data.
As a matter of human convenience, most of us will use business email for personal items as well. But when you sell a company your email address and all of its contents belong to the acquire, assuming it is a stock deal.
Preserve business email accounts, and only delete private messages from the account. Sellers should start this process well in advance of closing. Lesson learned.