Without a non-compete agreement, after the sale of a business, the previous owner could go off and create another company just like the first one, utilizing all of their unique skills. A buyer does not want to discover that their newly acquired business is losing its clients to another business founded by the seller.

The first interactions with prospective buyers can be critical to the success of a deal. Not only could you acquire the beginnings of an M&A deal out of the phone call, but this is also an excellent opportunity to learn valuable information about the market.

Escrow is a popular choice for risk minimization among buyers considering an M&A deal. If you are a buyer that is unsure about the validity of a seller’s claims, then it may be time to consider using escrow coverage.