Use a Confidentiality Agreement to Screen Website Buyers

July 24, 2014  |   How to Buy & Sell Websites   |     |   Comments Off on Use a Confidentiality Agreement to Screen Website Buyers

An unavoidable element in selling websites is the curious website buyer. This is the buyer who has no intention of buying a website but requests confidential information and asks tons of questions while hiding behind the anonymity provided by his computer.

The Internet offers anonymity and allows anyone anywhere in the world to inquire about a website listed for sale online. It doesn’t matter whether the potential buyer is a real buyer or a curious buyer.

This happens everyday. However, there’s a tool in the website seller’s arsenal that can screen buyers. This is the popular confidentiality agreement. A confidentiality agreement (often referred to as an NDA) can serve 2 purposes: Confidentiality and Transparency.

1. Confidentiality

Everyone knows that the purpose of a non-disclosure agreement is for potential buyers to agree not to disclose confidential information about a website business for sale to any third-party. In this way, the website URL, financials, and operation performance are kept confidential, as they should be.

2. Transparency

A confidentiality agreement also plays a key role in transparency, which is often overlooked. A potential buyer must disclose who he or she is in an NDA. Most confidentiality agreements ask for the buyer’s name, phone number, email address, and often a physical address.

This request for buyer information removes anonymity from the process. Many curious buyers who were hoping to hide behind their computers find that their anonymity is threatened. They immediately disappear once any real information is requested of them.

As a seller, let these buyers go. They were never going to buy the website business anyway. You would’ve wasted time and energy with them. Your screening process is working.

Why do non-buyers request information about websites for sale?

Some curious buyers want to dig into a website’s operations & financials to see how the seller’s website makes money. Other buyers go to websites-for-sale marketplaces and request information on dozens of businesses for sale with no specific investment objective in mind. They’re curious to see what’s out there. After all, it costs them nothing in time or money.

Ask these curious buyers who they are in an NDA, and they instantly disappear.

Real, serious buyers have no problem filling out an NDA. As a seller, verify the information that buyers submit. Verify that the information is real. The best verification tool is the telephone. Call the phone number provided in the NDA to verify that it’s real. Take a few minutes and talk to the buyer. Tons of buyer questions can be quickly answered in a 5-minute phone call.

Buyers perform due diligence on seller’s websites. Sellers must also perform due diligence on buyers. As a seller, find out who the buyer is. Establish a rapport with him. Speak to a human voice over the phone instead of exchanging impersonal emails only. If this person might one day take over your website, your “baby,” then you want to at least talk to him first.

This is how a confidentiality agreement can screen potential website buyers.


Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

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