Tip #87: Be acquired

Tip 87: Exit strategy – be acquired

So, we’ve agreed you aren’t going to IPO. But saying “we will be acquired” isn’t a good answer either – for many reasons.

First, duh, it’s obvious. Second, the passive formation (see back at tip #29) shows that the proactive approach of driving towards an early exit is not on your radar – and it’s going to be a battle for us to push you towards setting up the business processes crucial to getting to executing an exit.

Even more than that, though, we need your idea on the plan.

Who: who buys companies in your space? Do you know them yet? Why not?

When: what does your company need to achieve to be an attractive acquisition target from acquirers in your space?

How: are strategic buyers gobbling up pre-revenue technologies, or are financial buyers like private equity funds rolling up companies with EBITDA of $5 million? Are they doing full acquisitions or long earn outs?

If you can answer some of these questions, your exit slide can hugely enhance your credibility; but usually this slide loses the last sliver of credibility a presenter has.