![]() But you can also find out a lot via word of mouth,” he says. He recommends brushing up on the company you’re potentially partnering with before you go into the negotiation.Īs a buyer, “there’s a lot of information at your fingertips - for example, on Glassdoor, which shows you customer reviews and employee ratings. It recently acquired Profitwell, which offers financial reporting tools for SaaS companies. Jimmy Fitzgerald is the COO of Paddle, a startup that offers payments, tax and subscriptions solutions for SaaS businesses. Consider if both companies’ goals, visions and attitudes align, as this will make the post-sale transition smoother. Learning how to negotiate an acquisition is vital to making sure both parties get the most out of the deal, and the first step is making sure that the two companies set to merge will actually fit together well. So you’ve done your prep and had some promising chats with a potential partner: now what? When you have all of your initial thoughts and figures ready, Armoo recommends that you see the acquisition as your biggest sales job yet: get your best salesman on the job, usually the CEO, and enter negotiation mode. Get your company valued - M&A banks can help with this - and organise your data room with all of your financial, legal and personnel information. Once discussions get more serious, get your numbers in order. When you’ve got some potential buyers in mind, it’s worth writing out a general idea of your terms so that you can go into meetings with a clear vision of what your company wants from the deal. The power of a carefully selected partner can’t be underestimated even before considering a sale, build relationships with potential partners who feel like a good fit and share your company’s vision - a CEO should be spending 20% of their time networking, thinks Timothy Armoo, the founder of influencer platform Fanbytes (which was sold to digital marketing agency Brainlabs for an undisclosed eight-figure sum earlier this year). Preparation before you dive into talks is key to ensuring that you’re making the right decisions for your team and company from the beginning. This advice first appeared in Sifted’s Startup Life newsletter - sign up here for a weekly hit of wisdom from Europe’s founders and operators. Startups that have exited so far this year had raised an average of €9.75m at the time of acquisition, indicating that companies are being sold at fairly early stages - it took an average of seven years from foundation to sale, with the most common pre-exit rounds being seed and Series A.īut deciding to sell your startup can be a daunting task - where do you start? What should you negotiate? And what happens if the acquirer’s and the seller’s teams are like chalk and cheese? For any founding team thinking of exiting in 2022, here’s what the experts say you need to do to nail the process. Sifted’s stocktake of the state of European M&A in 2022 so far revealed that the average (disclosed) acquisition price was €97m. The latter really took off in 2021, with VC-backed startups exiting via mergers and acquisitions (M&A) worth more than $55bn. Any founder worth their salt will have an exit strategy built into their startup’s journey - whether a long-term goal of floating on a stock exchange or an earlier target of being bought out by a larger player. ![]()
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