Corporate Spying disguised as a Tender Offer

Here’s an interesting story I got from an acquaintance who ran a successful business that positioned him as a market leader in his niche. One day somebody contacted him and asked if he was willing to sell his business or open it up for partnership. He mentioned his selling price and that somebody agreed to it.

Because of which they went through the motions of selling the business. There was the due diligence review and the tour of the business process flow. After acquiring all this data the guy then said he needed time to digest it, so they parted ways.

A few months later my friend was surprised that this guy had set up a similar business as him.

Some people say that what he did can be considered in sports as “No-Harm, No-Foul”. But when you think about it, what that guy did was just plain unethical.

Some people deter these unethical practices by letting people sign a non-disclosure/no-compete agreement, wherein they aren’t allowed to talk about what they saw as well as set up a similar business as yours for a certain period of time.

Others ask for a show of good faith by asking for a non-refundable deposit of money to show that they are indeed serious in buying your company.