Attracting Acquisition Offers - Acquire.com Academy

So when you go to sell your company, your goal should be to get as many buyers to the table as possible with serious offers. There's a saying that if you have one buyer, you have no buyers. So I'm going to be going over some ways to attract as many offers as possible for your startup and understanding each of them. You can use mix and both. So I have 10 of them. So going over to the first one, this is really just a question that, that's my first question. Why do you want to sell? Are you really, you know, do you want to sell now? Do you want to sell in the future? Being really upfront about this can be pretty important to most buyers. So because buyers are typically looking at a lot of startups, unless you're just, you know, a very, very, very high quality startup in terms of growth, profitability, revenue, technology, you know, like the one, the best startups. So if that's, you know, like my company wasn't like that. So, you know, we had to, you know, really be pretty vocal. Like we went and sold the business. We didn't have Google or Apple or Tesla walk up and say, you know, hey, you're getting acquired. So I was ready to sell. I, I was, I was in the business for eight years. It was getting tiring. We had gone through, you know, we moved the company from. And I'll, I wrote a, a longer story about that, so I'll share that later. But to stay on topic, be sure that you want to sell like you're ready to sell so you don't get into a situation with the buyer where they give you an offer, you're on the same page and then you back out. So before you go to market to sell your business, be really sure that you want to sell the business and that, you know, it's a great, you know, outcome for you and something that should be celebrated. So just be mentally prepared because it's also not, you know, easy. You got to find a buyer, go through due diligence and I'll go through that more. But moving on to the next one, ensure you have a sellable business. So I run into a lot of startups that have no revenue. They're bleeding cash. The cap table is extremely messy. The founder is just super unresponsive. That doesn't necessarily make you have a business that's not sellable, but if you have certain things in your business that you can quickly fix, such as optimizing spend. You know, most startups spend capital very inefficiently. And I'm sure, there's many ways to reduce spend within your business. Maybe there's an opportunity to raise prices, to boost revenue. There's a number of different things, but just ensuring you have a sellable business is critical. Understanding buyers motivation so why are they looking to buy your company? Is it for financial reasons or a private equity group? And they are more focused on, you know, how profitable is the business, how you know quickly, is it growing, how much revenue is it generating? If it's a strategic buyer, you know, how does the technology and team fit into their current company? So and just asking that up front is perfectly appropriate. Like what are your, you know, motivations behind potentially acquiring my company? Number four would just being prepared, you know, tons of stuff that goes into an acquisition. But just when you first start talking to buyers, just having a simple, you know, P and L statement can really show that you are serious about selling your business, even if it's just a high level one. Just, you know, revenue expenses, you know, basically giving a snapshot into the business on, you know, where are these expenses going? You know, how does revenue trend over the last 24, ideally 36 months. What is churn, what is your lifetime value? Just, you know, another easy tip here is, you know, you can connect to, you know, chart mogul, profit, well bear metrics and give them read only access or you can just connect these metrics on microacquire as well so they can just see that whatever revenue you're representation representing is accurate. Number six would be just be transparent. So most buyers know that you know, your startup isn't as perfect as you're probably saying it is. So their job is to figure out what's wrong with this business. And sometimes just being upfront and honest about that can really be the difference between a deal closing and not closing. Because again, you can't do a good deal with a bad person. So if you're just upfront about, you know, ways to de risk the acquisition for the buyer, like hey, you know, we have a huge customer and they've been with us forever. But I just want to point that out because if we lose them, that reduces revenue by 20% or we had a bad month in July for like these reasons. You don't have to say that from the onset but just be transparent. Like if they ask, you know, be honest about your answers with the questions, set a fair valuation. So this goes to understanding what your startup is worth having a valuation you can justify and really just understanding how buyers are also going to value your startup because that's A huge gap that you're trying to bridge, which is a buyer's, you know, valuation and really, you know, your valuation as a founder. And really aligning those is, is key. So, and that starts with really understanding how do you value your startup. And so there's some resources on microacquire that you can definitely check out to help with that. Be flexible on terms. So if you are upfront to seller financing, that can be huge, that, that de risk this, the acquisition for the buyer immensely, even if it's just 25% or 10%. Like ideally buyers are typically looking for, you know, 25 to 50% seller financing depending on the size of the deal. The larger the deal, the smaller the percentage of seller financing. But this just basically shows the buyer that you're not going anywhere. You're going to be around, you're going to be available to help with transition and just de risk the opportunity for them as much as possible. And that's kind of like another huge factor when selling a startup is do everything you can to de risk the purchase for the buyer, like outline how you're going to transition things, which I'm going to go over in more detail. Understand valuations, be open and transparent, be honest. And that really helps a buyer get comfortable and more likely to issue a letter of intent, potentially acquire startup, point out opportunities. So consider, you know, what could you do if you stayed in the business? How, what are some opportunities? You as a founder know how to grow your startup faster than anyone. Maybe there's like some experts, but you know, some things that have worked like and more importantly the things that you've tried that haven't worked. So those could be opportunities that maybe someone who has a deep domain knowledge of marketing, they can understand, you know, what didn't work and maybe find ways to optimize it. And that would be, maybe it's a price increase, maybe it's, you know, whatever it may be, just pointing those out, you know how you can help. Post acquisition is huge and then number 10, don't stop growing. So you know, the easiest way to sell a business is to have a high quality business. So what I write here is just, you know, consider a flywheel, tough to get going, but full momentum when spinning while selling can be a time sucking distraction. Don't let it slow your momentum. Keep acquiring customers, stacking profits and improving products until it's time to sign the purchase agreement. Otherwise it'll be harder for the buyer to build upon your success and they won't make you an offer. So the number one way to attract more offers for your your startup is to just have a high quality business, have your focus in the same place, continue to operate your company as well as you possibly can, and that would absolutely lead to the most offers. So I hope you enjoyed this video and hope you learned a few things about how to get more offers for your setup.