When you are going through an acquisition with a good M&A advisor it is important to have a plan of action and set clear-cut objectives for the sale. While you might be thinking of your bottom line, there is a whole range of other objectives that need to be considered because they will impact your team and the company’s future success.
Knowing what you want out of the acquisition will give you more control. Have minimum and maximum lines clearly defined, and plan for negotiating, and the unexpected. Prepare The TeamPreparing the team for an acquisition is another important aspect of keeping control of the process. The buyer needs to fit in with the company culture, or the transition can be painful. Can your team align with the acquirer’s values and beliefs? How can you prepare your team for the acquisition?
Get an expert valuationValuations don’t only let the acquirer know your worth. It helps you to know how to negotiate during the acquisition process. Valuations will help the acquirer understand the startup’s potential for growth and establish a baseline value. Get your accounting in orderThe acquirer is going to tear right through your financials. As they should before making a big purchase. But if you have your accounting in order; revenue, expenses, and assets supported by documentation, the acquisition process will go a lot smoother. The following are some of the documentation you need to gather:
The Startup Acquisition ProcessNow that you have positioned the deal and established your worth, you can get the ball rolling on the acquisition process. Develop an acquisition planYour acquirer is already developing a plan to negotiate the offer. Prepare yourself with potential offers and negotiating steps so you don’t get steamrolled by a large corporation. You know they have seen value in your business, or they wouldn’t be devising an acquisition plan. Prepare an acquisition teamGather an acquisition team with IT experts, the CEO, an acquisition lawyer, and all other relevant personnel you feel should be at the acquisition meeting. They help provide information on the startup’s technical infrastructure and inner workings of the business that the acquirers might have questions for. Do your due diligenceThe acquirer will be doing plenty of digging of their own. Don’t just leave the ball in their court. You should be vetting them as much as they are investigating you. NegotiateAn acquirer will often start out low. Counteroffer, and both parties can meet in the middle. How much do you want? What is your company worth, and are you willing to part with the startup for less? Make sure that everyone’s objectives can be seen in the final agreement. Don’t feel like you lost a battle. Ensure the conversation is within the parameters of your main objectives before you get too deep. Especially as you can expect a lot of renegotiating and discounts in the process. Closing the dealClosing the deal is a huge moment for a startup, and even when things have gone according to plan, you may experience mixed emotions. Contracts are signed, and now you know your hard work and effort in your business has paid off, it’s time to let go. What Acquirers Consider When Buying a StartupYou can control the acquisition process by knowing what the acquirers want. They are not just looking at the dollar signs. Understanding their mindset will help you grab their attention and get the best deal for yourself and the buyer. So, what are acquirers looking for in a startup? This can vary widely, but may include:
What To Consider Before An AcquisitionSelling your startup can be a life-changing experience. You have put everything into it for the last couple of years, and you may feel a deep connection to the staff, the product, and the business. Here’s what you should consider before taking the leap. Are you ready to sell your startup?Startups can take years to establish, and the demand can begin to pile up. You know you’re ready to sell when you are prepared to hand over the stress and anxiety which often occurs to first-time founders. You may even decide to stay on after the acquisition or move on to greater things. Is it the right time to sell?Founders may begin to experience burnout when you need to keep raising funds. To relieve yourself of this burden, your choices are to increase capital or a merger and acquisition venture. Will you be able to accept the consequences? The consequences of the acquisition include:
The Bottom LineThe acquisition process can be laborious for the founders and acquirers, but the common goal is to generate value. The last thing that the founder should be worried about is losing control of the acquisition process. You understand the value of the company and its potential for the future, so you deserve appropriate compensation for the work you put into your product. To keep control, you need to know the ins and outs of the company. Have all your financials in order and prepare your team for the acquisition. Do your due diligence and hire a valuation expert as well as a full acquisition team to ensure you are getting the most out of the deal. You have done the hard work and deserve to reap the rewards. Author Bio Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of founders online. Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business. Alejandro has been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online. The post Expectations and Goals in Acquisitions appeared first on Social Media Explorer. Original source: https://socialmediaexplorer.com/business-innovation-2/expectations-and-goals-in-acquisitions/ The post Expectations and Goals in Acquisitions appeared first on connect social networks. via Connect Social Networks http://connectsocialnetworks.com/expectations-and-goals-in-acquisitions/
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