Success in M&A depends on you having a plan. Rush headfirst into an acquisition and you’re unlikely to notice the pitfalls – or even if the business is worth acquiring – before it’s too late. You can’t backtrack once you sign that asset purchase agreement (APA), so it pays to know what you’re doing beforehand.
To help you succeed with your next acquisition, CEO Andrew Gazdecki and Acquisition Manager Ky Pratt explore how to win deals in our latest webinar. Guidance that’s worth a fortune in real value when you move into serious dealmaking. Watch the full video below, or if you’re short on time, skip to the relevant sections where we’ve added clips and highlights for quick learning. Enjoy!
Do you want a free readiness assessment and personal introductions to our best startups? Speak to our M&A team about Buyer Concierge, a suite of free services under our paid buyer plans.
Who’s Presenting?
Andrew Gazdecki, Founder and CEO of Acquire.com
Andrew Gazdecki is the founder and CEO of Acquire.com and a lifelong entrepreneur. He bootstrapped his first business, Bizness Apps, to $10 million in annual recurring revenue, which he later sold to a private equity firm in a life-changing acquisition. Since then, he’s sold two more businesses, bought one, and founded the world’s largest startup acquisition marketplace.
Having been on sides of the M&A table, as a buyer and a seller, Andrew knows how complex and difficult acquisitions can be. He started Acquire.com to fix the complex acquisition process and make it easier for founders to get acquired, and he’s excited to share his knowledge with you today.
Ky Pratt, Acquisition Success Manager
Ky understands what it takes to sell a business. With a background in coaching and client success, Ky has been instrumental in several large exits, shepherding buyers and sellers through the acquisition process and ensuring everyone’s happy with the deal.
What Is Acquire.com?
Acquire.com is the best online marketplace to buy and sell SaaS startups. Combining expert M&A advisory and technology, our services help you get acquired fast and maximize your exit.
Since 2019, we’ve helped over a thousand founders sell their businesses, closed over half a billion dollars in deal volume, and registered over 500,000 entrepreneurs. Live internationally? No problem – we’re active in over 100 countries and every continent except Antarctica.
Establishing Goals That Matter
First up: your acquisition goals. Without them, you’re flying blind, predisposed to emotional rather than rational decision-making. Establishing goals that matter will ensure you stay on course during your search.
Highlights
- Understand why you’re acquiring a business – it gives you purpose.
- Define what a good business means to you.
- Is it something you’re interested in?
- Is it profitable, growing, and in your area of expertise?
- Is customer concentration low?
- What do you want to do with the business?
- “Good” is always subjective.
- What are your opportunity levers?
- What deal structures would you accept? All cash, earnout, seller financing, and so on.
- What challenges stand between you and an acquisition? Financing, experience, risk, and so on.
Communicating Your Process
Setting expectations with sellers makes you easy to work with. You’ll also find sellers more collaborative when they know what you need from them. Both of which lead to goodwill and better conversations.
Highlights
- Introduce yourself, goals, and background. You know your pedigree, but sellers won’t.
- Use our tools to prove credibility such as verifying your ID, funds, and connecting LinkedIn.
- Sellers get 50+ NDA requests – do everything you can to stand out.
- Share your evaluation process upfront so sellers know what to expect and can help you.
- Tell sellers what you need to make an offer – don’t let silence add pressure to dealmaking.
- You cannot overcommunicate in M&A. Buyer and seller success depends on communication.
Speed Wins Deals
Less haste, more speed is the name of the game in acquisitions. No need to rush your decision-making, but move swiftly and efficiently if you want to secure the best startups.
Highlights
- Time kills deals, so be quick, but don’t hurry and make mistakes.
- If you’re too slow, sellers may move on to more eager buyers.
- Top buyers make offers within the first 30 days.
- Speed means less uncertainty for buyers and sellers.
- Negotiate timelines with the seller so your expectations align.
- Get sellers excited to do business with you by being prepared.
How to Move Fast on Deals
Speed is all about efficiency and removing obstacles to your acquisition. Our expert tools and people can help you streamline your deal process. But only if you use them!
Highlights
- Familiarize yourself with the marketplace – take advantage of our efficiency tools.
- Get to know the filters, matchmaking, chat, and document builders.
- Use our resources to educate yourself on speedy dealmaking and common pitfalls.
- Work with the M&A team to find, evaluate, and make an offer on the ideal business.
- The M&A team can help during every stage of your acquisition, from start to close.
- The M&A team also helps sellers prepare important documents like CIMs.
- Take advantage of Buyer Concierge – it’s free and included in your buyer plan.
Building Your Reputation
The startup community is like any other – people talk. If you’re rude, unresponsive, or unreasonably demanding of sellers, they’ll never take you seriously. Leverage your reputation for a better deal.
Highlights
- The marketplace is a community where everyone talks.
- M&A advisors guide buyers and sellers to quality opportunities and away from risk.
- If you’re professional, fast, and friendly, you’re easily recommended for new deals.
- When sellers get multiple offers, your reputation can win or lose a deal.
- Reputation, how you carry yourself, is one of the few areas you control in a deal.
Q&A
How can I prove my credibility to sellers, especially if I lack experience buying businesses?
First, complete all platform certifications. Verify your ID and funds, complete your buyer profile in detail, enter your acquisition criteria, and link your LinkedIn account. Then, when you’re dealmaking, schedule regular calls with sellers to inspire their confidence in you. Don’t back out of deals unless something radically alters the risk profile. Reassure sellers that so long as the business passes due diligence you’re prepared to close – and quickly. This will help you win deals over competing buyers.
Do I need a clear strategy before reaching out to sellers, or can I figure it out as I go?
Yes, you need a basic plan for your acquisition. That plan can and probably will change as you start speaking to sellers, but you won’t instill much confidence by saying you’re just looking around. When negotiating a multimillion-dollar deal, sellers expect you to know what you want and why. They will ask you. Prepare a plan that you can share with them and you’ll boost your chances of success.
What are the best ways to negotiate a deal without causing friction or delays?
First, ensure you’ve built a rationale for the valuation you’ve given the company. If you need to add a non-compete clause or conditional payment to your offer, be candid with the seller. Everyone has their non-negotiables, and if you air them quickly, you’ll save everyone’s time. Finally, always negotiate on a call, if possible, since you’re 34 times as likely to get what you want. One hour-long conversation can also do a month’s worth of emails.
Get access to buyer concierge today.
Book a free 15-minute consultation with our M&A team to score your readiness to acquire and get an intro to our marketplace.
What basic tools or resources can help me streamline the acquisition process?
Take advantage of everything we offer you on Acquire.com:
- Draft legal offers in minutes with our letter of intent (LOI) and asset purchase agreement (APA) builders.
- Close your acquisition safely and securely, for free, with our escrow providers, Escrow.com and SRS Acquiom.
- Protect your data during acquisition talks by signing our automated buyer-seller NDAs.
- Learn tips from other founders who’ve sold businesses on Acquire.com in our podcast.
- Attend our regular webinars explaining how succeed in M&A with expert tips and insight.
- Educate yourself about acquisitions with our courses, ebooks, blogs, videos, and more.
- Speak to other acquired founders to learn from their experiences.
Our M&A team is also on standby to answer your questions and help you find and acquire the perfect business.
How fast should I move from the first contact with a seller to closing the deal?
Most businesses on Acquire.com follow a list-to-sell timeline of 90-120 days. During the first 30 days, you could be in exploratory meetings or starting due diligence. If you want to succeed at winning deals, you must use your time efficiently. Start with an indication of interest (IOI) before moving to an LOI. Get on regular calls – at least once a week – and set follow-up meetings at the end of every call. Don’t skip risk mitigation steps, but deal with them promptly and collaboratively with sellers. This is how you win deals.
How do I explain my acquisition process and goals to sellers in a way that helps build trust?
Be honest, polite, and professional. That’s all it takes. Show you’re serious by asking questions that allow you to move the deal forward. Respect sellers’ time by responding promptly. Only move forward after seeing private details if you’re serious about the acquisition. Don’t ghost anyone. Sellers understand you have a process and are reviewing multiple startups. Treat them fairly and you’ll earn their trust.
Why do deals fall through, and how can I prevent that from happening?
Deals fail for many reasons. A useful tip for avoiding this is to be transparent. Surprises kill deals. Share recent data, ensure it’s accurate, and update buyers if something in your business changes, even if it could negatively impact your deal. Honesty pays dividends. Although many deals fail due to factors beyond your control, consider what is under your control: use escrow, use our legal document builders, refer to our M&A team when you get stuck. Take advantage of all the help you can get to keep your deal on track.
When talking to a seller, how should I bring up deal structure?
Before you start searching for startups, think about the types of deal structure that appeal to you. Do you want an earnout? Seller financing? Non-competes? These deal components might vary depending on the startup you want to acquire, but ensure you decide your non-negotiables first. Then, when you find a startup you’re interested in, ask the seller what kind of deal they’re looking for – work out what’s on the table. Then send your initial offer and see how sellers react.
How can I use my reputation or past deals to gain an edge when negotiating with sellers?
By setting an example for other buyers through your professionalism, you’ll quickly gain a reputation in the marketplace as being great to work with. M&A advisors can more readily recommend you over less committed buyers. Use this as your edge over the competition.
With the buyer program, how involved are Acquire.com M&A advisors throughout the acquisition process?
The M&A team is on standby to help you through all stages of your acquisition, from finding startups to making offers to closing with escrow. Whenever you need help, just drop us a line at support@acquire.com.
How do you buy a no-code business such as a Bubble app? What gets transferred to the buyer and how?
First check that the seller has full ownership rights of the Bubble app and any licenses and APIs it uses. Then the seller can simply transfer the Bubble app to your Bubble account. Most no-code platforms can support this type of transfer, so it’s usually pretty easy. Ensure all the other stuff like third-party services and API keys are also transferred to your account. Then test everything is working normally before completing your acquisition.
Is there a listing platform like Acquire but for deep-tech (science-based) businesses?
If it’s an online business with solid fundamentals (financials, history, operations, and so on), you can still submit it to Acquire.com for consideration. We don’t preclude science-based businesses from submitting, so long as they’re online businesses (not brick-and-mortar) and preferably SaaS.
How can I keep all potential buyers actively engaged while ensuring I can select the right one when the time is right?
Inform buyers of your deal schedule so everyone gets treated the same. Then follow up every week to share updates on your process and anything that’s changed in the business – financials, press, features, and so on. Then when you’re comparing offers, choose the one that best fits your goals. A good offer now is worth infinitely more than a better offer that may never materialize.
Can you outline the benefits of signing up for one of your premium memberships for buyers vs the free plan?
Yes! As a paid buyer, you can chat with founders, request access to their private listing, use our legal document builders, and enjoy all benefits under the Buyer Concierge service (including one-to-one guidance). The free plan allows you to view basic listings only, so it’s really only to get a taste of the marketplace. Check out the full benefits comparison on our pricing page.
Is it okay to only upload a P&L for the most recent year?
Yes, but we recommend uploading at least three years (if you have been operating that long) since buyers want to see trends and historical behavior before making offers.
Is selling a VC-backed startup an advantage or disadvantage to a buyer?
Typically, the disadvantage is on the sell side. First, the VC firm would need to agree to sell the business. Also, some VC-backed startups we see aren’t profitable, probably because they’ve focused more on growth. Selling a profitable business is always easier. If it’s a profitable, VC-backed business, it might not require much more work to sell than a bootstrapped business. VCs typically like stock purchases over asset purchases, however, and buyers typically prefer the reverse. We’ve worked with all kinds of businesses and VC backing doesn’t usually influence the complexity or favorability of the acquisition in significant ways.
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 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.