Knowledge base

Buying or selling a company on the surface is a one-time financial exercise. What’s the company worth? In our experience, the best deals look beyond the purchase to what’s next? What’s the big idea both of these teams are building towards? That search for both financial and philosophical alignment is what we call “Exit-Market-Fit”. Read more on our blog here.

Onchain M&A is a nascent idea that DAOs and tokens can merge and acquire the businesses of other tokens, DAOs, and offchain businesses too. Today more and more businesses are being run onchain and more of the business is running onchain. What started with protocols transaction fees and onchain cash-flow is now full blown onchain PnL. From lending and trading to vaults and other DeFi protocols taking fees to marketing and liquidity incentives, smart-contract powered businesses can now be valued with traditional revenue and income multiples. Where there is financial and strategical value to be had, buyers will enter the market. Watch Relayzero’s founder talk about the Layerzero (LZO) acquisition of Stargate (STG) on Laura Shin’s Unchained Podcast.

Selling a crypto company operating off or onchain is very similar to selling a traditional business. Buyers are always looking to grow revenues, market share, or a strategic edge. The difference comes down to understanding the opportunity and risk which look new and novel. The art is communicating the opportunity to buyers in an easy to understand and comprehensive way to ensure the full potential of the market value can be achieved.

Slow down. If the buyer is truly interested, then it pays to take your time to figure out if the offer and sale is a good fit or you should pursue other buyers. Not every purchase price and market are the same. Are they paying cash, equity, or blend? Are there additional earnouts for investors or team? Is your company in remittances, banking, or software-as-a-service? Valuations, price, and considerations are all variables to research and understand.

Valuation depends on your business model relative to similar businesses and market conditions. For example, Paypal was trading between 1-2x sales (source: Factset) in 2025 but was significantly higher only a few years prior. Private valuations for stablecoin startups trended the opposite direction as buyers raced to buy strategic assets disrupting incumbents.

Looking at public market comparables, recent private market transactions, and the long-term strategic value of the business is the first step to understanding your valuation. Your revenue, assets, and intellectual property relative to the market are critical to understanding market value. Getting the market to pay market price, however, requires a disciplined sale process.

A structured engagement that gets your business ready for a sale: diving into your company, researching the market, and preparing the key materials to go to market.

Big or small, every deal has the same amount of work from a diligence standpoint. An average process has three broad stages: (1) Research & Preparation, (2) Initial Outreach & Due Diligence, and (3) Negotiations & Closing.

The first phase is about understanding your business’s strategic edge and valuation. It starts with a deep dive into your company’s business and assets, turns to researching your competitors and comparables, and ends with a ranked universe of potential buyers. This research is used to build a teaser, create a financial projection model, prepare management presentations, and decide how the sale will be run. NDAs (confidentiality agreements), process letters, and initial stock or asset purchase agreements are drafted in this phase.

As we enter Phase 2, it’s all about getting to the right people at the right time with the right information. We start with the highest-priority buyers and create checkpoints for them to keep opting into the process. First a short acquisition overview to gauge interest, then the teaser, then quick calls to talk process and answer initial questions. We prefer fast no’s, avoid oversharing, and create pitches tailored to each buyer over generalized information. Prospects who stay interested sign an NDA, get short chats with executives, and eventually access a limited deal room with the key legal, financial, and strategic files they need to build and validate the case for buying your company. That case is how a buyer wins internal buy-in and budget. The process culminates in bidding, shaped by what the seller and the market need.

As initial bids are received, we help your management and board contextualize the pros and cons of different opportunities. A well designed process and the right market conditions can create an environment where you want to negotiate further with more than one buyer at a time. This process leads to selecting one buyer prospect to exclusively negotiate a term sheet.

What is important to you and the buyer? While many term sheets include standard terms like purchase price, consideration, purchase agreement terms, other terms likely need to be negotiated in advance that are context specific. For example, indemnification terms, executive non-competes and compensation, representations and warranties, and break clauses are highly context dependent. Having the right legal counsel and advisor matters here.

It depends on the business and assets being sold. A simple asset sale can be done in 3-4 months, while a complete sale of your company’s equity requires a longer process of 6 months or beyond. The difference is liability: an asset sale is designed to limit the liabilities a buyer takes on, while an equity sale transfers all of your company’s known and unknown liabilities to the new owner. More potential liabilities mean more due diligence.

Asset sales do not work for some businesses. For example, if your customer agreements are not assignable without written consent or your business holds regulatory licenses, buyers likely need to purchase your company’s shares to acquire the business.

No bubbles or closing dinners until the money is in the bank. No exceptions.

Post-term sheet is all about dotting I’s and crossing T’s. Buyers and their legal and financial counsel dive deep into validating your revenue, expenses, assets, and liabilities. A well-run process also begins interviewing team members and planning team and tech transitions. Purchase agreements and related documents are negotiated heavily post-term sheet.

Every deal has its ups and downs. Before we engage with a company and its founders, we like to have a conversation about their business and personal priorities. This understanding is critical when a deal reaches a breaking point because every deal has its moments. Our job is to stabilize the highs and lows with simple advice about what really matters at the highest levels when negotiators get lost in the details. Yes, the details matter but the best deals require compromises on all sides. Knowing and prioritizing what really matters at the highest levels allows easy decisions when the process falls into endless rounds of redlined agreements.

Sometimes a buyer tries to reduce the agreed price or change key terms after the term sheet (aka “retrades”). This can be avoided in an organized process. The key is to share all material information and negotiate key terms as early in the process as possible. However, every buyer is different. Priorities and markets can shift mid-deal. Our job is to keep the deal on track.

A CVR (contingent value right) is a right to receive additional consideration after closing if a specified milestone is hit. It is granted to the selling shareholders as part of the purchase price, so it belongs to whoever owned seller stock at closing, regardless of whether they keep working.

An earn-out is the same economic idea (deferred, performance based consideration) but the term is usually used when the payment is tied to people staying and running the business.

Yes, every day.

Inspired by Sophie Alpert’s AI writing policy, here is how we think about using AI:

(1) Stand behind it. We must stand behind every AI idea.

(2) Think with AI. Developing ideas is a process of critical thinking. Replacing the thinking process with AI leads to a poor understanding and bad decisions, especially as context changes.

(3) Spend more time creating than it takes to understand. Our creation process should take more time than you need to understand it.

(4) Be incompressible. Where Sophie said, “Longer is not better,” Naval said, “In an age of stochastic compressors, be incompressible.” Every word, sentence, and graphic matters.

Finally, we use AI to do more with less than our traditional Wall Street counterparts. Why build PDFs when we can build interactive dashboards with live customer data? Faster, better, polished.

Yes, of course. However, AI is only as good as the prompter: context and historical experience change your approach.

At a client’s request, we can use local, open-source LLMs and other methods to protect customer data from private AI companies.