2009-11-13

WTM highlight #1 Priceline’s Glenn Fogel on doing a deal

Priceline's Glenn Fogel was one of the highlights of World Travel Market in our humble opinion.

Not only has the guy got enough degrees to make anyone sit up and listen but he has also been instrumental in some significant online deals.

So, his session at the EyeforTravel GetFunded Show on 'Aquisitions and Exits' was insightful and pulled no punches.

Fogel's top tips for selling your company are:

1. Get a lawyer - to cut through everything from the capital structure, personnel issues such as no-hire/non-compete clauses and non-disclosure agreements (which Fogel hates by the way!)

In is own words: "If you think I'm going to talk to your customers about the deal then you shouldn't be talking to me about it because you don't trust me."

2. Projections - again, in his words: "You have to have projections that have some connection to reality."

The mind boggles but clearly he is alluding to some creative accounting.To that he added to ensure projections are conservative enough so that during negotiations the company exceeds them rather than missing them!

3. Detail - be as detailed as possible to give the person confidence you have really thought about the sale.

4. Accounting - this one makes you wonder what kind of numbers people have pulled out of their hats and Fogel's concise advice was to consider what is reasonable and what is not.

Oh yes, and hire auditors early on but not your uncle! - "I will give you no money if don't know who your auditor is."

5. Revenue - another cause for nervous titters from the audience but suffice to say you have to show value not massive investment in online marketing. And, when you're thinking about what your company is worth you have to compare to a company like your own.

6. Exits - do you have to show profit? Here, Fogel cited companies such as ebookers and lastminute...

Also be clear about why you are selling - retiring is a good one but the company going to the wall, not so good.

"Always make sure the person who is selling is going to stay on and have a lot of skin in the game."

And, should you involve investment bankers in all this? Perhaps, one of the best WTM quotes,

"If you've got $5m in profit and $50m in revenue an investment banker does not add a bit of value. He's more like a used-car salesman only more educated."

It all makes you wonder about the mindset of people selling their companies or perhaps just some of the ones Fogel has come across.

By Linda Fox

This post was originally posted by Travolution @ Travolution Blog.
> Read the original post here