I received a blog, today, from an advisor in the US (John Warrillow): it talks about what (in the US) is called the “Proprietary Deal” – When acquirers use the term “proprietary deal” they are referring to buying a business directly from the owner without the hassles of a “greedy” investment banker [read “or advisor”] driving up the price by soliciting – or threatening to solicit — competitive bids for your company. A proprietary deal is basically an exclusive business deal.
Falling victim to the proprietary deal is easy. You get approached by a partner in a PE firm or a senior person from a big company in your industry you know and respect. They shower you with compliments about your business, invite you to a fancy lunch and then ask if you’d consider selling. Once you agree to a conversation, they convince you there is no need to involve an advisor to represent you – why pay the money, they’ll say, to some guy or gal who has done nothing to help you build your business – we’re friends …