Understanding Your Acquirer

Hey, this is Alex and in this short video, I'd like to talk about the importance of understanding your acquirer when you’re looking at selling your company. It’s especially relevant if you're the founder or CEO of a software company, a SaaS company, or an agency.

So what I often tell my clients is this: when you're looking at exiting your business, think of your company as the ultimate product sale. Because ultimately what you’re doing is you’re packaging your company so that it’s highly desirable to somebody that can be paying you millions of dollars. Most of the deals I do are usually $2 million and above. A lot of founders have a very sophisticated selling system for selling a product or service, but they really don't think through that an acquirer is buying the company.

What you want to do is give the same level of attention to selling your business because your acquirer is almost like a super buyer. Selling your business is the equivalent of having somebody paying you, in many cases, the equivalent of like 40 or 50 of your sales all in one shot. So just as you want to understand the avatar of your day-to-day products or services, you understand the psychology or the avatars of the buyer of your company, the acquirer.

One of the things I want you to really think about is for an acquirer, it's all about what we call risk management. There's a term you may hear a lot about prior to this video. It's a term called de-risking. Regardless of how solid you think your business is, it's still a risk because the acquirer is taking on ownership of a pretty sizable operation.

So because of that, just as a buyer of any product or service, the acquirer wants to have some assurance that this is going to work out. So then for a buyer of a company, they look for signs or assurances, or they look for cues to figure out, "Is this beyond my risk parameters?"

And so the more things you can do to help the buyer lower the risk, the better. This video is too short to get into all of that but the thing I want you to walk away from is this; it’s just really understanding the psychology of the acquirer, what's a priority to them.

With all the acquirers I've talked to, that could be a private buyer, it could be a private equity company, a family office, an institutional fund, a corporate buyer...all of them at the end of the day, what they want to do is lower their risk. So the more you can do that for them, the more likely the sale is going to go through and certainly at the terms that you want.

So this is Alex, and this is something that we help a lot of our clients do on a pretty regular basis which is helping them exit at the best terms possible. So if this is something you'd like us to help you better understand what types of acquirers there are out there and what do they look for, then definitely reach out.

I'd love to share the resources and if we can help you in any way with actual process itself, we'd love to earn your business and really make this as smooth a process for you as possible.

So this is Alex, and I look forward to talking to you soon. Again, reach out if you feel like my team and I can help you in any way or if you're looking for more resources to actually better understand the exit process.