Would you sign all these documents to find out about this business?

[TrustButVerify]

I made contact with a broker who had a "website business" for sale... the firm didn't have a lot of websites within their listings....but I figured I'd get some information.

The listing itself was completely vague, just kind of rambled on about the industry and how it's a 50 million dollar industry...

No mention of revenue/cashflow... nothing... just the asking price and the industry.

I called up, was told I'd need to sign a confidentiality agreement.... "no problem" says me, I completely understand.

And then I get the documents...

Yes, that's documents...

1 page non-disclosure agreement

2 page confidentiality agreement

1 page "personal financial statement"

Here's a copy of the finance statement

personalfinance.jpg


About equivalent to a mortgage application.

The business was priced at 70k... the broker admitted it didn't have much revenue when I called him, but the listing stated it was a "ground-floor opportunity to get into the business".

After finding out via phone it didn't have much revenue I wasn't too interested and when I saw the documentation they were asking...

Have you ever seen anyone ask for so much data before even revealing the site or any data about it?


What would you do?

[benitez17]

I would throw it in the trash.

An NDA is one thing, but I'm not handing over my life story to get the most basic information about a business that doesn't have much revenue and sounds like it is clearly overpriced.

[Clinton]

For higher priced bricks and mortar businesses it's quite normal for the buyer to let the seller credit check him etc. He is also sometimes required to provide three years worth of audited accounts.

But not so much for online businesses and certainly not at that $70K price.

Maybe the broker just has one document set that he sends out to all prospective buyers irrespective of the business they're interested in buying.

It's not impossible that the seller is trying to appeal to a certain type of buyer - the big corporates - who may expect that kind of a doc pack.

1 page non-disclosure agreement

2 page confidentiality agreement

Two docs covering essentially the same purpose? How do they differ in your case?

And is this any broker I know?

[TrustButVerify]

Yeah, that's basically what I did do... I threw them in the trash.

It kind of tells me the seller has no idea what he's doing and he's hoping to strike at rich...

Clinton,

Yes, the two documents were both covering the same thing... they were just worded differently. One was only a few paragraphs (what I would have expected) and then the 2-pager was really long winded and talked about intellectual property and possible competition, etc.

It's not a broker that sells websites. They are a broker based out of the Minnesota, USA but they just happened to have a website for sale.

[tvanslooten]

I'm based in Minnesota. If you're willing to share, I'd be curious what the company was. I didn't even know we had brokers here And I would never give all that information just to get some general information. Did you tell him/her that?

Travis

Yeah, that's basically what I did do... I threw them in the trash.

It kind of tells me the seller has no idea what he's doing and he's hoping to strike at rich...

Clinton,

Yes, the two documents were both covering the same thing... they were just worded differently. One was only a few paragraphs (what I would have expected) and then the 2-pager was really long winded and talked about intellectual property and possible competition, etc.

It's not a broker that sells websites. They are a broker based out of the Minnesota, USA but they just happened to have a website for sale.

[TrustButVerify]

Hey tvanslooten,

I think it was like sunbelt something broker. Sure, you have tons of business brokers in Minnesota! (everywhere for that matter) They just had site that came up on my radar.

Yes, I told him that it was crazy and he said, "well thanks for the call back..."

He just blew me off..