Entrepreneurs have been selling their businesses for over 5,000 years. Remarkably, a major portion of our current-day deal basics align quite well with Mesopotamian transactions.
The most striking difference today is the exponentially larger range of buyers available to sellers.
And yet, many founders today are treating the most important sale of their life as if we are living under ancient Sumerian market limitations – selling to the most familiar nearby buyer, or to the first party who approaches – when far more attractive alternatives surely exist.
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ORIGINS: A HOUSEHOLD AFFAIR
In ancient Sumer around 3000 B.C. temples served as civic, economic and religious hubs, and a household could secure a contract with a temple to provide goods or services to the temple’s community. Those household rights were transferrable, and historical evidence (in the form of cuneiform tablets) shows that such rights were regularly bought, sold, inherited and otherwise transferred among members of a temple community.
As with today, the arrangements between parties were governed by written (albeit cuneiform) contracts. As with today, the records include auditable accounting (albeit on clay slabs) listing how much grain, livestock, laborers, land or other assets an enterprise held. Priests served in centralized capacities as accountants, scribes, judges and enforcers whose accounting and contractual records were stored in archives. Deals were done close to home, between one household and another.
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FROM “ALL IN THE FAMILY” TO “BUSINESS IS BUSINESS”
It took about twelve hundred years to liberate business enterprises from the grasp of households. Babylon’s ruler Hammurabi developed a written legal code around 1760 B.C. that recognized and regulated a range of things including business partnerships.
These groundbreaking rules governed contracts, fairness, accountability, transparency, loans, risk, profit, loss, enforcement, and even dispute resolution. Such building blocks of business were comprehensive enough to unleash major economic growth for Babylon. And they paved the way for enterprises to be sold beyond family networks.
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OWNERSHIP FLOWS
Fast-forward 2000 years. The Garonne river’s swift current dropped 12 meters as it was passing through Toulouse, France. Cascading water provided excellent power for the dozens of local mills arising beside the river around 1100 A.D, but it was challenging to secure sufficient capital to build out the dams and facilities, insure them, operate them, rebuild them after inevitable floods, and also maintain partnership stability among the relatively large group of local investors whose lifespans would average less than 40 years. A major difficulty was that partnerships needed unwinding or restructuring upon death of a member.
Local investors invented a partnership structure designed to extend beyond individual lifespans using interests that heirs or the partners themselves could freely sell or transfer. By the 1300s dozens of such entities were financing Toulouse’s mill enterprises, effectively mainstreaming the concept of a company as a permanent legal entity. Ownership-interests had been liberated to exist beyond the lifespan of individuals – and therefore be sold or transferred while the enterprise lived on.
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DUTCH TREAT
Over the next 300 years as explorers plied the seas, the voyages of trading ships became longer, more numerous, more expensive, and riskier. In 1602 a group of leading trade financiers in the Netherlands, which had become the world's premier merchant nation, responded by merging several competing trading companies together under state sponsorship to create the Dutch East India Company, a most innovative new enterprise. It was capitalized with shares sold publicly to a wide array of individuals, traded on a public exchange, and protected by its charter to limit the owners’ liability. This arrangement simultaneously provided a permanent capital base to the company, offered on-demand liquidity to any shareholder via a public exchange, and created downside protection for owners by attaching company debts to the entity itself rather than to the owners. Thus came the concurrent birth of both the limited liability company and the public trading of shares, a major leap forward in dynamic capitalization and ownership of companies.
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SMALL WORLD, BIG MARKET
The 2026 business reality is that information, capital, people and products flow around the world with unprecedented ease thanks to computing, communications, travel and a global financial system.
Across the 5,000 years of business sales, owners have realized more value each time their market expands. Major leaps have widened the circle from local to global. The Sumerians, Babylonians, millers of Toulouse or Dutch merchants could never imagine today’s ability to create a worldwide market with such ease.
In the past three years, Haviland & Co has advised on the sales of two different US-based family companies that went to foreign buyers (as well as other sales to domestic buyers) in sale processes that solicited bidders from five continents. One sold to an Italian company, the other to a Singaporean family investment office – both of which outbid the respective highest US bidders to win the deals, and provided more attractive non-financial terms as well.
The great advantage of 2026 M&A markets versus 5,000 years ago is the accessible global pool of buyers… which Haviland & Co would encourage almost any seller to consider and explore. If that seems daunting, an experienced advisor can make it easily manageable.