Creating Competition & Scarcity When Selling

Author

Ryan Chen
February 03, 2025

Hey there,

Welcome to Capital Growth Partners newsletter. It is approximately a 4-minute read.

In today's newsletter, we are going to go over how to maintain leverage during negotiations with multiple interested parties through a combination of strategic positioning, timing, and clear communication.  


We are going to go over…

  1. Create Competition (Leverage Through Scarcity)

  2. Position as a “Must-Have” Opportunity

  3. Master the Timing

Actionable Tip

Selling a business is by far one of the most important things to any founder.

All the sweat, blood, and tears that accumulate for just one tiny moment.

That’s why preparing the P&L and BS ahead of time is so important so that you can sell for peak price.

Use this model with your finance team to price your exit ahead of time.

If you're selling a pre-revenue business - then prepare the IP valuation and the story well before meeting any suitors.  

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Create Competition (Leverage Through Scarcity)

People pay more for things other people want. It doesn’t matter if it’s a book, lunch, or a company. Curate a controlled environment where you reveal interested parties without going over specific details and delay granting exclusivity to anyone early on. You can be upfront and transparent about this.

Position as a “Must-Have” Opportunity

Place an emphasis on why the business model is unique, whether it’s the IP, a dominant market position, a strong customer base, or unparalleled growth metrics. Then highlight how your company aligns with the investor’s specific portfolio strategy or objectives, making it clear that you’re an ideal fit for their goals. Additionally, show undeniable evidence of growth (e.g., strong revenue CAGR, expanding market share, or increasing customer retention), making it harder for parties to walk away.

Master the Timing

Let the interested party know your timeline for an offer or term to be submitted so there’s a sense of urgency to submit an offer. 

How I Can Help You

If you like this newsletter and want to work with me, there are a few ways we can do so:

  1. You can book a meeting to work with my firm, Capital Growth Partners (link)

  2. You can send me referrals to this newsletter by sending this (link) 

  3. You can invest in great prospective companies by booking here (link)