lunch and learn talk at msft accelerator - m&a how do corporate
TRANSCRIPT
ADV & MSFT ACCELERATOR
L&L - M&A DEALS
HOW DO THEY HAPPEN AND WHAT DO CORPORATES
REALLY WANT
QUICK OVERVIEW
1. Who am I & why am I here
2. Why do corporates buy companies
3. How do deals happen
4. How to avoid “Oh Shit Moments”
TODAY’S PRESENTATION
[1] WHO AM I?
Investor @ADV
8 Years 12 Years
ADV SOURCES, SUPPORTS AND SUPERCHARGES UK DIGITAL TECHNOLOGY BUSINESSES FROM ENTRY TO
EXIT
STARTUPS STARTUPS SCALEUPS SCALEBIGS SUCCESSES
PRE-SEED SEED VENTURE GROWTH EXIT
Invest in microfunds,
accelerators and incubators
Co-invest via
accelerators; co-
invest with angels
and VCs
Co-invest with
VCs
at Series A-B
Co-invest with
institutions, VCs
and Corporates at
Series C and
beyond
Support
companies to go
through sale and /
or IPO
[2] WHY DO CORPORATES BUY COMPANIES
A FEW REASONS
YOUR TECH
YOUR TEAM!!
YOUR TEAM!!YOUR CLIENTS
AND HERE ARE MORE REASONS
To enter a new market
Industry / vertical /Geography
New Product
to sell to their clients Cheaper than…
YOUR TEAM!!AND PERHAPS TO KILL
All depends on their POV
[3] HOW DO M&A DEALS HAPPEN
HOW DO M&A DEALS HAPPEN
Buy side Sell side
NOT GONNA COVER THIS TODAY
BUT HERE ARE
A FEW THINGS
TO KEEP IN MIND
IT’S A
PROCESS
IT’S A SIGNAL
BRING IN AN EXPERT
BE OPEN – NEW BUYERS CAN COME
BUY SIDE
THEY WANT
YOU
Opportunistic Targeted
2 TYPES
Opportunistic
< 0.1%
Targeted
99.9%
2 TYPES
Opportunistic
< 0.1%
Targeted
99.9%
2 TYPES
WHY?
Corporates
TARGETED
BUY SIDE
2 ways to get there
Already work together
FIT
NEED
STRATEGY
THEY HAVE PEOPLE MANAGING THE
PROCESS
INTERNAL EXTERNAL
THE PROCESS FROM THEIR SIDE 1/2
1. Understanding internal strategy
2. They see a tech/product/company
they want
3. Market research and Long list of
companies
4. Short list of companies and deep
dive
5. Modelling excel [A lot]
6. Referencing of product and team
BEHIND THE
SCENES
THE PROCESS FROM THEIR SIDE 2/2
1. Get to know you meetings [3-10]
2. Starting to work together – POC/Pilot [3-9
months]
3. Signing a contract - Working together [6-18
months]
4. They make good revenue with you and see they
can make shit tons more
5. Internal alignment and discussions -3-6 months
6. A lot more excel modelling !!!!
7. DD and discussions
WORKING
TOGETHER
The more mature your
business
The faster the process
[4] HOW TO AVOID “OH SHIT MOMENTS”
KNOW WHAT YOU WANT
£££
THIS
WILL
TAKE
TIME
DON’T BE A
HERO
USE AN
EXPERT/YOUR
INVESTORS
EGGS 1 BASKET - TALK TO MANY
BUYERS
A SENSE OF
URGENCY IS KEY
IT’S ALL ABOUT
RELATIONSHIPS
DON’T IGNORE YOUR [MINORITY] SHAREHOLDERS
CONTRACTS WITH CHANGE OF CONTROL PROVISIONS
SPLITTING A CAP TABLE - NO
NEGOTIATIONS POINTS
• Bad cop: Use investors, your board, the team
and God as a foil to avoid putting yourself in a
corner
• Desperation: Never ever share that you are
running out of money or options.
• Every point of contact is a sales
opportunity: Every single email, call, tweet,
text or meetup with anyone at the acquiring
company is a chance for you to make your
case.
• Valuation Game: Safest answer “We are
going to let the market decide so give us
your best offer”. They will push you to go
first but resist unless you are pre revenue ->
Anchor!!
• Don’t lie: Everyone exaggerates but don’t
make shit up
• Transparency cuts both ways: Of course
buyers want to know the truth about your
biz, BUT so do you, so put the buyer on
notice at the start of the process. Tell them
you expect regular and open communication
as a sign that the deal is progressing.
Nothing more stressful then a convo going
THEY
MAY END
UP
SAYING
NO
