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Selling Your Technology Company for Maximum Value: A comprehensive guide for entrepreneurs by Rupert Cook

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9: Negotiating And Signing Heads Of Terms

Depending on the type of process you are running, you will either get to Heads of Terms (HoT) with one player or with several at the same time. There are many forms of Heads of Terms (also referred to as a termsheet, a Letter of Intent (LoI) or a Memorandum of Understanding (MoU)), but whatever form they take, they are intended for one purpose: to provide a framework from which to proceed to a Sale and Purchase Agreement (SPA). A termsheet can be very brief, but it should at least cover the key points of the deal and all the elements of the consideration, so that there is less room for disagreement and prolonged negotiation when you come to the SPA.

If you’re not sure of the demand for your company ...

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