How to find buyers for your business?
Selling a business is unlike selling anything else. This is especially true when it comes to achieving an exit for your startup. So, where are they, buyers? How do you connect with them and get offers to buy you out?
Many throws around the quote that “businesses are bought, not sold.” That may be true to a certain extent. Yet, there is a lot you can do as founder and CEO to ensure your business becomes obvious and must buy. You’ll get a lot better deal for your business if you are proactive, strategic and have this goal in mind every day, even before you hit the launch button.
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Start Forging Partnerships
One of the most common precursors to acquisition is a partnership. You start working together with a larger entity. Maybe you are helping them to service their customers. They may be using your technology. They might package your products and services together.
If you are working well together and they see that it may be more profitable to simply own your company, or that throwing their resources into your company could 10x your value, they should come to the conclusion it just makes sense to buy you on their own.
Constantly Be Building Relationships
Looking back one of the best things founders say they have done is to consistently build and nurture relationships with other CEOs, founders, and even their competitors.
If you are thinking about how to find buyers for your business, remember that CEOs of large companies will often get involved in large acquisitions. It’s still often a very human transaction. Most acquisitions fail. Knowing who is on the other side of the table can make all the difference. Who you know and who knows you are still just as important as any metrics in your business.
Hire A Banker Or M&A Consultant
Just as founders and CEOs should always be raising and closing and growing, they also equally need to have their eye on the end game. Sadly, the majority don’t.
That is certainly a part of why many startups don’t make it, and these big billion-dollar exits and even those in the hundreds of millions are such inspirational stories. If you are pressed on time and really need to sell then you may want to see what an investment banker can do with subtly trying to sell your business.
If you are wondering how to find buyers for your business keep in mind that every founder and CEO should also have an M&A advisor and consultant to not only help them secure a buyer but to be working towards the best possible exit.
Focus On The Business
If you have the luxury of time, then, of course, one of the best ways to find a buyer is just to build a really appetizing business. Then you will have the chance of private equity and strategic corporate buyers approaching you, in addition to the option to go public.
Focus on building the customer base, the technology, the revenue and growth that others will want to own. If your business is profitable you may never need to sell. Perhaps unless you have raised outside money and are expected to deliver to investors.
Or you may just find merging is the best way to take your mission to the next level.
Beat The Big Guys To The Punch
Once you meet them big corporations and the people behind them probably won’t seem as ‘evil’ as they are often made out to be. At least this is the experience of most founders I’ve interviewed who have ultimately had grand exits of this type.
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They may offer the best possible next step for your vision. They are often also the most desirable buyers. When you think of giants like Microsoft, Oracle, Apple, Google or Johnson & Johnson, they have a ton of experience in the M&A process and buying a business. That can make it a lot easier as a founder.
If you know what their problems are, and what they are going to be, then developing those solutions and new technologies, and being cheaper and faster to buy than them buying able to recreate it can earn you a big offer.
Unfortunately, for all their glory, it is true that massive organizations move slow. It can take them a long time to implement ideas. Numerous layers of administration can make it far more expensive for them to bring things to life. This is your advantage as a startup. Use it.
Disrupt The Market
Your other alternative is to get out there and disrupt the market and set a new standard that customers and users in your space will demand.
Do that effectively and someone will have to buy you, or at a minimum make a big investment in you, partner with you and use your technology.
In some rare moments of genius, founders have been able to craft this in such a way that many of the top players in the industry wanted in.
We’ve seen major leaps in technology in many sectors over the past ten years. We’ve seen it in banking and lending, in transport, in how we do business. There is still a long way to go and many areas ripe for innovation, new efficiency, and new players.
Just be sure you are raising big and have a strong legal team so they don’t try to force you out or close you down another way.
When it comes to how to find buyers for your business there is more than one way to do it. You can do it by digging in and being unignorable. You can do it by forging the right connections and proving your value and potential. You can do it by hiring others to do it for you.
Whichever path is right for you having a strong M&A advisor in your corner can make all the difference in the ultimate outcome, how soon it happens and the terms of your exit.
Remember that mastering the storytelling side and how you are positioning your business is critical when it comes to engaging and speeding up the process. This is done via your acquisition memorandum. This is super important to reach a successful acquisition. For a winning acquisition, memorandum template take a look at the one I recently covered (see it here) or unlock the acquisition memorandum template directly below.
ACQUISITION MEMORANDUM TEMPLATE