Selling business: is it legal for competitors to pose as potential buyers to gain insight?


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I'm looking to sell a website and wondering if it's legal for a competitor to pose as a buyer to get detailed insight of how my business operates?

i.e. If they have no intention of buying the business, just want to see how things work (and be able to look at my Google Analytics, which I have to show to all potential buyers).

Legal Acquisition Competitors

asked Mar 11 '14 at 10:10
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Richard Clark
110 points

2 Answers


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Even if it isn't, there's nothing to stop them sending a third party shill to do their reconnaissance for them. Of course you could attempt to put various layers of access vs interest in, but that won't stop the third party issue and will irritate genuine buyers.

answered Mar 11 '14 at 13:39
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Nick Stevens
4,436 points

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Unfortunately, people do this. If you've been reading up on the Candy Crush saga (http://metro.co.uk/2014/02/13/candy-crush-saga-makers-to-sue-game-they-copied-4303096/), companies sign documents, begin due diligence, disengage and then decide to steal the idea. Sure you can sue but have fun in the courts for a few years of your life.

One way you can combat against this is the speed of your sale. Have a process -- Step 1 is a 50K foot overview of the site and its capabilities. Step 2 is an NDA or an in person meeting...Step 3 is a term sheet, then a deposit in escrow -- whatever. Have a process that filters out the tire kickers and gets serious buyers into the funnel quickly.

When you're talking to potential buyers, don't just demo your site and the analytics (I'm not sure how Google Analytics information would help your competitor if they had that information, btw).

Ask them questions on how fast they want to move, what they're looking for, how your site will provide value to them, etc.). A lot of times the answers to these questions can help you uncover people who are just sniffing around.

Streamline the "buy" process so you can sell quickly and then let someone else worry about the idea being stolen. :)

answered Mar 11 '14 at 13:58
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Chris
337 points

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