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What is a Blind Ad in The Sale of Your Business?

Jonah Pollone

Sellers Confidentiality Seller Articles Seller FAQ

What is a blind ad? You may have heard of the term but aren’t sure of the exact definition. 

To confuse matters even more, there are many names for a blind ad, such as a business listing, web write-up, etc. 

The blind ad is the first piece of information buyers will see when learning about the sale of a business. It needs to be appealing without giving away the identity of your company. 

We have created blind ads for over 400 clients in our 20+ years of business. Each business receives a unique blind ad that fits the exact needs of our clients to protect their confidentiality. 

To reduce your confusion, we will explain what a blind ad is and how brokers use it to share information about the sale of your company without revealing identifying information that could jeopardize your sale.

Let’s begin.
 

What is a Blind Ad in the Sale of a Business?

A blind ad offers information about your business to draw a buyer in without giving away the identity of your company

A Blind Ad should: 

  • Get the buyer excited about the opportunity
  • Not reveal confidential information 
  • Weed out disqualified candidates 

Blind ads provide top-level key metrics like revenue, cash flow, and inventory. This information, along with the company’s description, helps to filter for compatible buyers

Although the blind ad maintains your confidentiality with most buyers, a good broker will still be cautious about who they send it to. If one of your competitors sees the ad, they may be able to tell based on the description alone that it's your company.  

A good brokerage will not share your blind ad with one of your competitors without your permission. 

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If you are not receiving enough inquiries and some time has passed since you went live with the blind ad, you may choose to go through riskier channels, like sending the teaser to competitors. This strategy is often used if you have exhausted all options and are open to selling to a competitor who could be interested in your business.

Most owners don’t want to share confidential information with their competitors and for good reason. But, if you're open to selling to a competitor, you could receive a significant premium for the business. 

Always remember that your competitors might just be looking for information they can use to improve their business. 

What Information Should NOT be in a Blind Ad to Advertise the Sale of my Company? 

As a general rule, don’t include heavily identifying information about your company such as your company’s name, specific city, or pictures of the facility.

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Some companies are comfortable with including their name in their blind ad and revealing identifying information. If you're considering this path, assume that everyone will learn about the sale. Work with an experienced broker to help mitigate any potential risks.

Some examples of identifying information you may want to be cautious about including are: 

  • The square footage of your building 
  • The number of employees 
  • When the business started

If your company has a niche, but you are one of the few businesses that specialize in it, you should be careful how you describe it AND what location you choose to share.  

As you get further into the selling process, you may update the ad to edit the information it contains. 

When Does the Blind Ad Come Up and Where is it Advertised in the Sale? 

The blind ad will be included in the marketing package creation process, which comes up right after you sign a listing agreement and before your business is listed for sale. 

Blind Ad of Pool Company Listed for Sale

It will typically be created directly after a confidential information memorandum (CIM). This will allow the broker who creates your 30-60 page CIM to boil down information about your company to display the highlights in the blind ad. 

Once the blind ad is created along with the other marketing materials, it will be posted on online business listing sites as well as the merger and acquisition firm’s site. 

Why Should the Blind Ad be Non-Identifying For the Sale of My Business? 

Since it is one of the first things each prospective buyer sees, you will not want the blind ad to give away identifying information.

In the beginning, a large number of buyers may hear about your business listing and see the blind ad.

However, only a select few should be given access to your more identifying marketing materials after they have been thoroughly vetted. This prevents your confidentiality from being breached. 

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We've heard of instances in which brokers automatically send confidential information once an NDA is filled out on their website. Our process is always to interview buyer candidates and require copies of driver's licenses, to avoid sensitive information getting into the wrong hands.

 

Who Creates the Blind Ad to Market the Sale of My Company? 

If you are selling your business through a broker, they will create your blind ad. If you are selling your business on your own, you will make it. 

If you are selling independently, you should be cautious when drafting your ad and get a second look at it before posting it online. 

The benefit of having a quality broker create your blind ad is that they should have experience in making many of them and know how to write them in a way that gets more buyers while protecting your confidentiality. 

Depending on the size of your company and what type of buyer you want to market to, your broker will write the blind ad differently. For example, the blind ad for a larger company in an industry with a lot of strategic buyers in “acquisition mode” might not include a purchase price. 

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You are always at risk for breach of confidentiality during the sale of your business, so you need to be mindful and hire advisors you trust to handle the sale. If you're selling the business yourself, breaching confidentiality is likely to happen.

 

Do I Get to Approve the Blind Ad That Will be Used to Market the Sale of my Business? 

Just like your other marketing documents, your merger and acquisition (M&A) advisor should give you the chance to review and approve the blind ad before they post it online. 

Brokers should work with business owners to make sure they are comfortable with the level of confidentiality before the blind ad is sent out. 

Sell Your Business Confidentially and Successfully 

Now that you know everything about a blind ad and understand that brokers are not simply posting your information on the internet, let’s get to your next step. 

After the blind ad is created and posted, it will attract buyers that need to be vetted. 

Quality brokers will maintain confidentiality while assessing buyers’ financial and personal compatibility for the sale. 

To learn more about the process of vetting buyers while keeping your sale confidential, give us a call today. 

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