When you first sit down to plan your acquisition, several things can happen. Your heart may sink as you learn of the complexity of the process. Or you might worry about that long slog to the finish line stealing time from running your business. Either way, the end will seem distant, foggy, and uncertain.
The Acquire.com team and I know that feeling well. Andrew, the CEO, and I have both sold businesses before. I even made a career out of it as an M&A broker. Today I spend my time eliminating the pain points of the acquisition process in my work as VP M&A at Acquire.com.
Most recently, that culminated in the launch of Managed by Acquire. A service that helps you (and other profitable SaaS founders) find the right buyers and negotiate the best deals without giving up time for what increases your valuation at exit – hitting your revenue and profit goals.
You might wonder, “Why sign up for Managed by Acquire if I can sell for free?” It’s possible, and in some cases, wise to do so. Bigger acquisitions, however, usually involve more work. The stakes are higher. Trusting your time and experience alone might not deliver the best outcome.
And that’s where my team and I can help sell your business. Although Managed by Acquire is, at heart, a brokerage service for SaaS startups earning $1M+ revenue, we never turn anyone away without at least giving some advice. That’s the Acquire.com difference.
It All Starts With Goodwill
You don’t spend decades in a people business like M&A without learning the value of goodwill. People buy from people, and when you’re transacting deals involving millions or tens of millions of dollars, building rapport and trust is critical to everyone walking away from the deal happy.
Exclusively transactional relationships seldom create long-term value when selling a business. I’ve seen them fail many times in my career. A broker refuses to give even the most basic advice to a potential client and loses the advantage early goodwill provides like referrals and networking opportunities.
Since my tenure began at Acquire.com, I’ve used every opportunity to create goodwill in the marketplace. Whether you’re requesting expert advice from the Advisor Directory, attending Office Hours, or inquiring about Managed by Acquire, my colleagues and I aim to be helpful above all else.
Let me give you a recent example. A founder inquired about the Managed by Acquire service but didn’t qualify. An outside broker might’ve turned him away empty-handed, but that’s not how we do things here. The program is an extension of the Acquire ethos, so what did I do instead?
I gave him our acquisition playbook, confidential information memorandum (CIM) template, data room, and everything else. Also, I offered some pointers on his LOI and introduced him to legal counsel. With the help of his advisors, the founder sold his business at terms that made him happy.
I’d like to think we were partially responsible for the success of that deal, but we didn’t take any commission. Goodwill always comes back around (in this case, a referral). I can’t guarantee we can solve every problem (that’s what advisors are for, after all), but we’ll try to at least.
We Do the Hard Work for You – But You’re Still in the Loop
If you ask someone to help sell your business, how do you know you can trust them? You might worry they’re pushing deals for an ulterior motive. That closing is more important than closing at a price and terms that make you happy. We have felt and understand that need for reassurance.
You might not know anything about the acquisition process going in or even become an expert by closing day. But you’ll learn enough to know you’re getting a good deal. We’ll handle everything and only involve you when necessary, but it’s still a collaboration.
What matters most is that you continue hitting revenue and profit goals throughout the process. Don’t let the acquisition distract you. There are no guarantees, so mentally checking out before the deal closes risks the whole endeavor. Until then, we’re a team.
How a Typical Managed by Acquire Engagement Works
Preparation Phase
After your first inquiry, Rainier, Andrew, or I will contact you to discuss what happens next. Usually, we begin with a few forms and a phone call to establish your goals and how we might help you achieve them. Much of it involves reflecting on what led you to where you are today.
We’ll ask questions like:
- Why are we talking?
- What do you want to achieve from working with us?
- How did you get to this point in your career?
And your answers help plot the course ahead.
With you and us aligned, we’ll move into the next stage: preparing your startup for the market. You’ll receive an email outlining how this works and will answer questions about your business that allow us to write a CIM, a brochure advertising the acquisition opportunity to buyers.
If this were a sci-fi movie, we’d pop a device on your head, hook you up to a computer, and extract everything we need to know for the CIM in a few seconds. Unfortunately, you’ll type it out instead. No need to worry about grammar – just brain-dump everything you can (the more, the better). We’ll tidy everything up and refine it for public consumption.
The next step is your data room. We’ll send you a link to a drive folder where we’ll store everything for your acquisition – your financials, CIM, operational information, legal documents, and lots more. Anything a buyer might need to evaluate your business.
Now is also the best time to begin due diligence on yourself. If you want the process to go quickly, you need to scrutinize your business as a buyer might. You probably can’t remember everything in the history of your business, and that’s okay, but now is the time to learn.
Expect buyers to ask you some unexpected and potentially difficult questions. You don’t want to get on a buyer call and fudge your answers or you could hurt your valuation. Think of this preparation phase as training for a marathon. The more you train, the easier the race is.
For example, if you do due diligence on yourself now, you can zap any nasty surprises before they become an obstacle to your acquisition. Wait for those issues to appear later, and you risk delaying or derailing your acquisition or at the very least leaving money on the table.
I can’t think of a single acquisition in my decades of M&A experience where no unexpected problems arose. It’s just part of the game. I’m so conditioned now that if one didn’t have any issues, I’d wonder, What’s wrong here? Self-diligence minimizes those surprises so you can confidently negotiate from a position of strength.
M&A Phase
Managed by Acquire connects you with two motivated buyer pools. One, qualifying and vetted buyers from the primary marketplace, and two, a smaller yet exclusive set of high-caliber buyers who’ve entered into an agreement with us to get first refusal on the very best startups.
Think of this second set of buyers as VIPs. We’ll explain who these buyers are and whether any match your criteria for the acquisition. They’re all highly capitalized, motivated buyers familiar with the Acquire marketplace and are the first buyers we’ll introduce you to.
Before buyers can scrutinize anything, your approval comes first. Everything is anonymized initially. No one even glimpses your CIM until we’ve established interest with a blind profile and financial snapshot that summarizes the opportunity.
Along with the blind profile is a non-disclosure agreement (NDA). If a buyer is interested, they must sign the NDA first (so you can see who it is), and by cosigning, you approve them joining the process. We’ll then send them the CIM and move into the next phase.
You might be surprised to learn that VIPs don’t see your asking price. Not even in the CIM. This first buyer set acts as a kind of litmus test for the wider market. People can view and pass on the opportunity, but we’re also going to learn things we can do to make the CIM better.
Consider your CIM as a living document that answers questions before a buyer asks them. When we make that first buyer call, you don’t want to talk about KPIs or line items. You want to get to know each other and how you operate. Building that goodwill is so important.
Across several weeks, we’ll deliver CIMs to your buyer shortlist while fielding basic questions about your business, attending buyer meetings, and evaluating offers. You’ll join me or one of the other Managed by Acquire experts on buyer-seller meetings where you’ll meet interested buyers, answer their questions, and ask some of your own.
Meetings are set with an agenda, allowing us to cover the necessary items in good time. Expect several calls with the same buyers as you move from introductions to pre-diligence Q&As and then to offers: indications of interest (IOIs) or letters of intent (LOIs).
Once one or more deals are live, we open up a Slack channel so everyone stays aligned. I’ll create a transaction scheduler that lists and timestamps every task that must happen until the close-of-escrow date and who’s responsible for each, updated weekly.
Closing Phase
With an offer on the table that interests you, you’ll start due diligence. The buyer will dig into everything from your financials to your operations, sending you 100s of questions about your business. We’ll answer these as best we can and refer to you if we need more information.
What’s critical at this stage, and why I believe Managed by Acquire is such a critical service, is communication. Often, everyone goes silent once the closing process begins. But if no one speaks unless there’s a problem, all that goodwill you built in the early stages diminishes.
The transaction scheduler helps keep the momentum and goodwill going throughout the closing stages of your acquisition. Everyone checks in once a week regardless of whether they have anything to say or an issue to raise. It also keeps everyone focused on closing – no one wants to show up at that weekly meeting to say they didn’t get their task for that date done, right?
Remember: communicate to a fault. As your partner and advocate going into the acquisition, it’s our duty to keep those lines open and active. No one should ever feel on the back foot. Not you or the buyer. Just clarity, accountability, and communication all the way to closing.
This non-stop focus on process makes the Managed by Acquire service so invaluable to time-poor and stressed-out founders. In some respects, finding you the right buyer is the easy part. The administrative stages of your acquisition are where things so often go sour.
But that’s why you’ve engaged us as your advisors. To stay on top of everything and avoid the common pitfalls of selling your business. You might enjoy hiking, but you don’t wander into strange territory without a guide because if you do you get lost or worse.
And we’re there with you until the end. Right up until escrow closes. If we spend months on your deal and it doesn’t close, you pay us nothing. And that’s where we do things better than many other advisory services. No retainers, just a one-off success fee of 5 percent. And nine times out of ten, the fee pays for itself in a better outcome for you.
Since joining Acquire, the team has spent a lot of time streamlining the acquisition process and educating the market, rendering some of the broker’s role obsolete. But in my view, this only crystallized how Managed by Acquire helps those larger, more complex acquisitions where you just don’t have the time to manage the process yourself. And it’s been a delight to give back to the startup community by sharing everything I’ve learned in my two decades in M&A. It’s an exciting time – and we’re just getting started.
For the love of startups!
The content on this site is not intended to provide legal, financial or M&A advice. It is for information purposes only, and any links provided are for your convenience. Please seek the services of an M&A professional before 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.
