Non-Compete

Also known as: Restrictive covenant, non-competition agreement

A contractual restriction preventing the seller from competing with the business they just sold, typically for 2-5 years within a defined geography and industry.

WHY IT MATTERS

Every PE deal includes a non-compete — the buyer isn't paying for a business just to have the founder start a competitor next month. The negotiable parameters are duration (2-5 years), geography (local / regional / national / global), and scope (narrow sector vs. "the entire industry"). A want-to-sell founder negotiates tight parameters tied to actual competitive risk. A have-to-sell founder often accepts 5-year, industry-wide, national non-competes because "we just need to get this done." The difference can shape the founder's next 5 years materially.

POST M.5

Have to Sell vs. Want to Sell — And Why Buyers Can Tell the DifferenceBuyers don't just price your business. They price your timeline.

Read →POST M.6

Think Like a BuyerYour buyer isn't looking for reasons to pay more. They're looking for reasons to pay less.

Read →POST M.9

The Life-Changing Event That Catches Founders Off GuardYour business is one phone call away from being worth half of what it is today.

Read →POST R.5

The License That WalkedTwo of nineteen technicians hold the gas certification. One of them is the founder. When Ed leaves, half of Meridian's gas capacity walks out with him.

Read →POST R.16

The Informal RoleThe role that was never written down because everyone knew what it was becomes, at exit, the role the buyer can't evaluate, bind, or price.

Read →POST R.17

No Non-CompetesThe non-compete you never asked your best people to sign costs nothing to put in place and everything to not have.

Read →POST D.18

The Restrictive Covenant StackThe non-compete is the restriction founders know about. The non-disparagement and confidentiality provisions are the ones that do the most damage.

Read →

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