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Are Dot Coms are sellers since Day 1?

The constant buy-ins of “dot coms” and other internet related companies by the biggest players could impact the mentality of the future companies to come and would demand a better drafting of some legal documents.

By the constant practice of the biggest internet companies (Google, Yahoo, etc..) to acquire smaller companies, one can only wonder if it will become a philosophy of some business mens or entrepreneurs to develop a “dot com” and/or internet related companies, with the sole purpose of selling it after certain point. I’m sure there will be cases where the creators of some of these business will take it as a personal project and won’t sell, but that cannot be said of most of the actual businesses.Looking at this trend as a practicing lawyer, this is having a clear impact on drafting of business agreements between shareholders and partners. We (lawyers) need to make sure that our clients interests are properly protected “if” the company should come to a “sell or not” situation. This should include not only the Bylaws but also a shareholders agreement is recommended. Special Majorities, quorums, preemptive rights and other issues must be clearly addressed.

(This analisis was published by me on 4/16/07, in the GLG News Forum in respect with Google’s acquisition of DoubleClick)