“Our mission is to build the world’s most founder-friendly startup acquisition marketplace.”Acquire mission statement, June 2021
Every day, thousands of founders enter the acquisition process anxious and uncertain about their future. What should be a happy moment is soured by confusion: How do acquisitions work? What’s due diligence? How can I close at my favored price and terms?
As the acquisition vortex starts spinning, the demands on you multiply. You need to populate your data room. Vet buyers and evaluate offers. Draft and sign legal documents. Reassure stakeholders. The list goes on – oh, and you still need to meet your growth targets.
Your reward for building a profitable business? A confusing and inefficient process where even the smallest error invites failure. We don’t think that’s fair, so in our mission to help more startups get Acquired, we’ve launched the world’s first guided acquisition process (GAP).
What Is the Guided Acquisition Process?
The acquisition process is historically complex and confusing, especially to founders. When you’re not writing the book on how to run your startup, you’re negotiating with buyers, consulting with advisors, or answering due diligence questions. Email threads can stretch for miles, and mistakes are common.
The guided acquisition process radically simplifies everything into a single workflow. No more juggling multiple systems. We’ve standardized everything from the first offer to closing escrow. Even legal documents like letters of intent (LOIs) and purchase agreements are in-platform.
Imagine having a virtual M&A advisor for your acquisition. Someone that guides you through each stage of the process, explains what to do next, and offers instructions and legal templates when you need them. GAP helps manage your acquisition and bring it to a speedy, rewarding close.
Few events in life require as much attention as an acquisition. It’s a complicated dance performed upon a knife edge, where even the slightest error can knock you off course. We’re proud to bring you GAP and hope that it helps thousands more startups get Acquired.
Check out how GAP works in a video from our CEO, Andrew Gazdecki, below.
A Life-Changing Process Deserves a Guide
Every acquisition matters on Acquire. Even smaller wins can launch you to bigger and better things. Rather than hold out in vain for that multimillion-dollar offer, GAP gives you an early exit when the going is good so you can apply what you’ve learned to a new venture.
Acquisitions are stepping stones in your entrepreneurial career. Use them as a tool for advancement. No longer do you need to spend weeks researching the process. Let GAP steer you through to life-changing exit, offering you support and resources when you need them most.
Maybe you’re fielding inquiries, for example. GAP helps you evaluate buyers and provides downloadable NDA templates for sharing confidential data. Or perhaps you want to make an offer, where you can then build and send letters of intent (LOIs) in just a few clicks.
Central to GAP is the dashboard that lists interested buyers or startups you’re interested in acquiring. Here, you’ll see at-a-glance the status of your acquisitions and what actions you or the other party can take next. It keeps the momentum moving. No stagnating deals.
Need to sign and send a letter of intent or asset purchase agreement? Do it digitally. Approve, reject, or change virtually anything about your acquisition at almost any time. It doesn’t matter if you’re a buyer or a founder, you retain full control over the process, not some third-party or system.
That said, you can hire an acquisition professional right within GAP and give them permissions to manage your acquisition. Or maybe you just need help with tax or something else. Either way, engage from over 50 vetted advisors with a direct link to the M&A Advisor Directory within GAP.
How the Guided Acquisition Process Works
The guided acquisition process is built into your Acquire workflow. It’s not so much a new product as a multi-level upgrade to the marketplace. The next time you log into your account, you’ll find it under “My Acquisition” (founders) or “Startups” (buyers).
The acquisition process is split into five stages:
- Evaluate buyers
The first stage is to vet interested buyers, gauge their interest, and set deadlines for each stage of your acquisition to keep momentum going.
Your dashboard lists interested buyers so you can track who has access to your details and what stage of the acquisition they’re in. Under the tips and resources section, you’ll also find an NDA and data room template and an example P&L you can use in your acquisition.
- Field offers
Once the letters of intent start rolling in, you must review, negotiate, and accept one of them to keep your acquisition moving. Once accepted, however, you won’t be able to negotiate or discuss your startup with anyone else (unless your deal falls through).
Available under the resources section are LOI templates, a seller financing template (if you agree to offer it), and a selection of articles on how to evaluate and negotiate LOIs. If any of the terms are unfamiliar, check the in-GAP glossary for a definition.
- Due diligence
The bit most founders fear! But don’t worry, GAP offers a data room template in the first stage and it’s here again along with a template P&L. Start populating your data room with financial and operational data and then share it as evidence when responding to buyer questions (retaining permissions is critical).
We’ve included articles to help you understand what’s involved in due diligence, what questions you might get asked, what evidence to provide, and lots more. We recommend reading these resources thoroughly and then consulting with an advisor if you’re still unsure.
- Escrow & transfer
You’re almost there! Once you and the buyer are happy, you each sign an asset purchase agreement (APA) and any other necessary definitive documents within GAP to finalize the price and terms of your acquisition. That sews up the legal side of your acquisition and allows you to move to escrow.
GAP integrates with Escrow.com to close your acquisition safely. The buyer will start escrow by transferring funds, and then you transfer the assets. Once the buyer approves receipt of those assets, Escrow.com releases the buyer’s funds to you. And that’s it!
Once you’ve verified the receipt of funds from Escrow.com, mark your startup as Acquire’d and you’re all done. Congratulations!
The GAP for buyers also consists of five steps:
- Evaluate startup
Once you’ve reached out to a few startups and been granted access to them, you must then evaluate which are worth pursuing. You’ll do some light diligence on their listing and talk to the seller to assess the acquisition opportunity and whether it’s worth pursuing.
Among the resources, you’ll find our multiples report (updated whenever we release a new one) to establish whether asking prices are fair, and blogs explaining how to evaluate startups and choose your first acquisition.
- Make an offer
Your shortlisted startups now move into the offer stage. It’s time to draft, send, and negotiate a letter of intent (LOI). Our LOI Builder sits within GAP so you can access it in one click and send your offer in minutes.
Once the founder has reviewed your offer, they’ll either accept or reject it. A rejection doesn’t mean the end of the deal – you can drop into the chat to discuss and send another after you’ve negotiated new terms. Your dashboard tracks the status of each startup so you don’t lose track.
- Due diligence
When the founder accepts your LOI, your deal moves into the closing stages. First up: due diligence. Our resources explain how to do due diligence, but it generally involves sending the founder questions that mitigate acquisition risk and the evidence you’ll accept to substantiate their answers.
Once you’ve completed due diligence, you can then send an asset purchase agreement (APA) and any other necessary definitive documents to finalize the deal. You or the founder can draft this and then both of you sign it digitally to rubberstamp the price and terms before moving to escrow.
- Escrow & close
GAP integrates with Escrow.com to ensure you close the acquisition safely. You send Escrow.com the funds for the acquisition, and the founder then sends you the assets. Once you approve those assets, Escrow.com releases the funds. Job done.
Before starting escrow, you’ll need to confirm you’ve signed an APA, completed due diligence, and are happy to use Escrow.com. Otherwise, you won’t be able to start the escrow transaction. This is to protect you and the founder against potential fraud.
That’s it! You’ve just Acquire’d a startup with our guided acquisition process.
Does GAP work for any startup?
Yes, the guided acquisition process works for any startup you can list on Acquire.com.
How long does GAP take?
The guided acquisition process only takes a few minutes to complete. However, escrow can take up to 10 business days depending on how big the transaction is. Factor in negotiations and due diligence too. We expect most GAP transactions to close within weeks, not months.
Do I have to use GAP to sell or Acquire?
Technically, no, but we urge you to use it for greater trust, security, and transparency in your acquisition. We can’t control anything that happens outside of Acquire. GAP gives you a clear audit trail of your conversations and documents and keeps deal momentum moving.
Where can I view legal docs in GAP?
All legal documents are available to view in your chat history or from the central dashboard within GAP. You can view and download these documents and digitally sign them.
Can advisors use GAP?
Yes, you can give your M&A advisor access to GAP so they can manage your acquisition for you.
Please note that the guided acquisition process is not a substitute for professional advice and should not be construed to create a fiduciary, principal-agent, attorney-client or any other sort of professional relationship or representation between you and Acquire. Always seek the advice of an M&A professional before entering into any M&A transaction. It is not Acquire’s intention to solicit or interfere with any established relationship you may have with any M&A professional. The guided acquisition process is provided for informational purposes only to assist you in navigating the M&A process. Please use caution when entering into any M&A transaction.