Mechanics of a Small Acquisition
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Mechanics of a Small Acquisition
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Re: Mechanics of a Small Acquisition
#2Believing that the finish line is just yards away and finding that it is actually miles is not going to be good for your company’s morale.
I've learned this lesson the hard way. It's easy to get caught up in acquisition discussions, so be careful not to get ahead of youself. The cost for the acquirer to engage is much less. They are larger and sometimes have full-time staff devoted to M&A, while your startup's bandwidth is very limited.
Re: Mechanics of a Small Acquisition
#3This is very reflective of the acquisition process my company went through when it was acquired(Priced at $13 million). However, one area that can't be emphasized enough is the distraction, time, and mental capital that this process entails. If you are not careful, it can hurt your business and its trajectory. Luckily, we had good people running the business for the founders while we concentrated on the acquisition process. One area not addressed very closely in this article is the difficulty of not sharing the possible acquisition with employees as you go through the process of gathering all of the due diligence data and having all of the meetings. Of course, keeping the acquisition process a secret from your employees isn't always required...but in our case it was. That added to the stress of the due diligence process for us.
Re: Mechanics of a Small Acquisition
#4There's little public information about small acquisitions and how they happen -- thanks for sharing. Everyone would be better off if there more information and transparency around these processes.
Re: Mechanics of a Small Acquisition
#5Believing that the finish line is just yards away and finding that it is actually miles is not going to be good for your company’s morale. I've learned this lesson the hard way. It's easy to get caught up in acquisition discussions, so be careful not to get ahead of youself. The cost for the acquirer to engage is much less. They are larger and sometimes have full-time staff devoted to M&A, while your startup's bandwi…
It's also difficult to avoid getting so excited and consumed by the process that you lose focus on what your business is actually doing. The acquirer is sending their deal team but you won't have one working for you (even if you get a banker/broker, it still takes up a lot of the founders' time), so someone still needs to mind the store.
Re: Mechanics of a Small Acquisition
#6There's little public information about small acquisitions and how they happen -- thanks for sharing. Everyone would be better off if there more information and transparency around these processes.
I went through a small acquisition (single digit millions) and we're building a membership site that would help people understand this process (from the seller's perspective) and the potential pitfalls, what sorts of things do you think must be addressed? Or perhaps need greater attention?
Re: Mechanics of a Small Acquisition
#7There's little public information about small acquisitions and how they happen -- thanks for sharing. Everyone would be better off if there more information and transparency around these processes.
I went through a small acquisition (single digit millions) and we're building a membership site that would help people understand this process (from the seller's perspective) and the potential pitfalls, what sorts of things do you think must be addressed? Or perhaps need greater attention?
What are the things that drive price? What does the diligence process look like? Managing telling employees vs secrecy?
Re: Mechanics of a Small Acquisition
#8There's little public information about small acquisitions and how they happen -- thanks for sharing. Everyone would be better off if there more information and transparency around these processes.
I thought Basil Peters' Early Exits (www.early-exits.com) was a pretty decent overview.
Re: Mechanics of a Small Acquisition
#9Earlier quoted context omitted.
I went through a small acquisition (single digit millions) and we're building a membership site that would help people understand this process (from the seller's perspective) and the potential pitfalls, what sorts of things do you think must be addressed? Or perhaps need greater attention?
What are the things that drive price? What does the diligence process look like? Managing telling employees vs secrecy?
I've written an ebook about the due diligence process and I could write a post that explains it if enough ppl are interested
Re: Mechanics of a Small Acquisition
#10Interesting read, but for my part, I'm much more interested to learn _how_ to start the process. That is, tips on how to position your company to make it a candidate for acquisition. (Apart from a great product and name of course - got that). Ways to flag potential suitors? And ways to make it clear that you are looking for buyers? etc. Any pointers or text to look at would be much appreciated.