by Lisa Calhoun
Lots of entrepreneurs dream about selling their business someday—but only a few are born “exit engineers.” The entrepreneurs that position their companies to sell well seem to magically move the process. Or do they?
Write2Market often gets hired by entrepreneurs who have exited, who are exiting, or who are planning their exit. Like with everything else, there’s an art to crafting the exit—and many times it relies on market perception and timing as much as anything else.
Are there things you can influence, though? Many say, yes. Speaking with a CEO of a $100M B2B firm strategizing his team’s exit today, I decided to write this post and share the three most common success strategies I’ve seen. As my conversation partner observed, they are just not that commonly shared.
Make a list of companies that could acquire you – and share it
The entrepreneur often has a list, but doesn’t share it. Smart sellers DO share it, with their:
- Advisory board
- Senior team
- Legal counsel
- Accounting counsel
Results: the list of opportunity grows and everyone gets on the same page about the kind, and the quality, of contacts you need. The right people know when to bring up an opportunity indirectly.
A lot of companies get bought by a competitor – play hard, but nice!
Competing fiercely as a market leader or challenger puts you in a spot where a lot of acquisitions happen.
As another $50m firm CEO shared with me this week, “Given who we are, our best move may be to combine with our top competitor.” The marketing messaging for this company positions them very strongly against another similarly sized firm—it looks like war, but it’s actually courtship, M&A-style.
In a real life “Game of Thrones” approach, do the exercise of drawing the map of your industry in five years without your company as a stand-alone entity. Which alliances would you be most open to? And make sure to always compete fair; you might share the same office one day!
Be vocal – be seen – be known
Planting seeds of appeal is a key way to insert yourself into the five year dreams of strategic acquisition partners. Lots of entrepreneurs know that “their company was brought up” in a private conversation, but few ask themselves how that conversation got kicked off.
To get on the short list or on the radar and prep those “private chats,” make it a priority to:
1) Speak at major industry events, like the CES, NRF, IRCE, Offshore Technology Conference, SAPHIRE NOW, Drinktec, Dreamforce or whatever is analogous in your industry
2) Win big national awards in your space for that “thing you do” that you want to be acquired because of (often around innovation)
3) Brief top journalists and analysts in your field far ahead of any official coverage or analyst report—as soon as you can, invest in the habit of positive, regular contact with global media around your successes and vision
4) Develop and promote proprietary advantages you display aggressively even if it doesn’t make you money—like key business intelligence, a key private event, a beefy methodology, or ongoing research
These activities set the table for regular inquiries.
If I had just one measly dollar for every time I’ve heard strategic company crow that they know “who they want” months before making real contact, I’d be able to take you to dinner anywhere in this city. In the big shell game of who acquires who, make sure anyone can easily figure out under which shell your pebble naturally belongs.
Write2Market advises on the right communication strategy for your growth stage. If this is something you’re figuring out, please invite us to the conversation by calling us.