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Mechanics of a Small Acquisition

quotidianventures.com

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Re: Mechanics of a Small Acquisition

#11

Post by king_magic »

sovande wrote: post #10

Interesting 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.

Ditto. I'd like to know if it is a process that really only starts once someone has noticed you, or if it is something an owner can push for. If so, what is the best way to do this?

Right now, my strategy is to pursue integration and use it as an avenue to acquisition. Not sure if it's the most viable method, though.

Re: Mechanics of a Small Acquisition

#12

Post by bigsassy »

sovande wrote: post #10

Interesting 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.

Ok. Here you go.

http://maplebutter.com/getting-your-startup-ready-for-an-acq...

Re: Mechanics of a Small Acquisition

#13

Post by danielweber »

I knew of one company that was, despite wanting to be acquired, made it as hard as possible. Someone showed up with the "accept no other offers for 90 days" and the company freaked out that they were being pressured. All discussion ground to a halt after that.

Re: Mechanics of a Small Acquisition

#14

Post by dirtyaura »

sovande wrote: post #10

Interesting 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.

I've been through one acquisition. The acquirer came to us, without us really realizing their plans at the time of the first contact. Around the same time, we were also contacted by a few other parties. What I've heard from other people, this seems to be the norm at least in consumer internet space.

It's rare acquisition in which the acquirer hasn't followed your company for some time. So you are likely to have a better success if you get into radars of potential acquirers by suggesting biz dev deals first instead of direct acquisition proposal.

Re: Mechanics of a Small Acquisition

#15

Post by dglassan »

sovande wrote: post #10

Interesting 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.

I've gone through one acquisition within the last year. Ours came about through a combination of us releasing a new feature and getting some pr that caught corporate dev's attention (they read techcrunch too you know), and we also tried to bring our acquirer on as a client around the same time so we were talking with people outside of corporate development as well.

Re: Mechanics of a Small Acquisition

#16

Post by ringoboo »

camz wrote: post #9
maxpalm wrote: post #7

Earlier quoted context omitted.

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

Yes please

Re: Mechanics of a Small Acquisition

#17

Post by ScottBurson »

king_magic wrote: post #11
sovande wrote: post #10

Interesting 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.

Ditto. I'd like to know if it is a process that really only starts once someone has noticed you, or if it is something an owner can push for. If so, what is the best way to do this? Right now, my strategy is to pursue integration and use it as an avenue to acquisition. Not sure if it's the most viable method, though.

It's as with any negotiation: whoever needs the deal the worst is in the weaker position. There is such a thing as shopping a company around looking for an acquirer, but you're unlikely to get as good a deal as if they come to you.

Re: Mechanics of a Small Acquisition

#18

Post by dchuk »

wangarific wrote: post #6
maxpalm wrote: post #4

There'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?

Do you have a mailing list of anything else I can sign up to to be notified when this launches?

Re: Mechanics of a Small Acquisition

#20

Post by bretpiatt »

sovande wrote: post #10

Interesting 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.

It really is simple and very difficult, build a great product, get traction, wow your users. After that, be patient and keep doing it. The early exits you hear about are the exception, not the rule. When you begin a startup be ready to spend the next (on average) 7 years.
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