Are you Missing an Opportunity to Sell?

A friend asked me to sell his company for him. It was a solid company with some good niche products in an M&A market much like today.
He said “I won’t take less than $14 million” because that is the value based on what his country club, golfing buddy sold his company for. As a good advisor, I said he could only expect $10-$11 million, maybe $12 million if I can get a good auction process going.
I took the company to market and received several bids in the $10-$11 million range. Due to the multiple offers, I was able to create an auction process securing a top bid of $12.9 million. My client reiterated, “I won’t take less than $14 million” and turned down the offer.
His business and the capital markets changed over the next two years. I heard that he took it to market and received offers in the $7 million range. These offers were also turned down because they were insufficient. Things continued to deteriorate and he finally accepted an offer of around $4 million a couple of years later.
There is a lot that can be learned from my friend’s unfortunate outcome:
1. When everything is going right, it’s a good time to sell
2. Hire an M&A advisor to run a professional process and trust its results
3. Golfing buddies lie, take the offer and lie right along with them