The Value of Working with Proven Serial Entrepreneurs
When I graduated in 1995 from Harvard Business School, there was this new thing called the Internet. We all had to figure out how to use it to create new businesses. I watched one classmate build up a company in less than a year that he quickly sold to eBay for quite a nice chunk of change without ever even generating a revenue stream. Another classmate did the same thing with Amazon. Neither of them ever sold another company. I also saw my peers creating products with no markets, answering questions no one was asking, promising to fill needs that didn’t exist. There was suddenly a whole world of information and connectivity at our fingertips, and yet the majority of companies built back then soon faded into oblivion.
The 10 Most Important Lessons Learned from Selling Over 100 Companies
The two of us have sold over 100 businesses over the past 25+ years and we’ve learned many important lessons along the way. We’ve played roles on all sides of the exit process - as M&A investment bankers (Morgan Stanley, Robertson Stephens, Lazard, etc), serial tech entrepreneurs (10 exits in software, mobile, Internet), heads of corporate development (Macromedia, multiple acquisitions/investments and sold to Adobe for $4Bn), CFOs of start-ups and investors (23 companies). We’d like to share some of the most important ones with you.
How to Choose the Right Partner for Your Startup
People should do what they’re good at. Coders should code. Hackers should hack. Ballers should ball. The thing is, launching a successful business requires doing a whole lot of different stuff. So if that’s what you want to do, you’ve either got to be good at everything, or else you have to be humble enough to admit that you aren’t, self-aware enough to know what you can do and what you can’t, and savvy enough to find the right partners to fill in the gaps.
Why Bootstrappers Make the Best Entrepreneurs
I always bet on the bootstrappers to win simply because they can’t afford to lose. When the chips are down and the business is on the line, I want the guy who knows that if he doesn’t figure out how to fit that square peg into the round hole, his whole life will implode. He has no choice but to roll up his sleeves and JFDI.
Strategic Buyer vs. Financial Buyer (M&A Differences)
As one considers a potential sale of a business, determining who are the most likely buyers will become a critical issue for the seller and the seller's financial advisors to address and consider. Identifying the best buyers for a business from an early stage will greatly improve the odds of a successful deal process, resulting in the target company being sold at an attractive purchase price from the seller's perspective.
What is a "Data Room" and What Do I Put In It?
A Data Room is simply put, a repository of all the information you need to assemble that will be required for potential buyers of your business to review as part of the due diligence process. In the old days traditional data rooms were, quite literally, a physical space in which all the physical folders of confidential documents were kept.
Virtual Data Rooms allow the information to be securely shared while also allowing the seller to monitor and manage the who, what, when and where of information access.
How a Strategic Buyer Will Value Your Business
Congratulations! Your discussions with a strategic buyer have progressed to the point where they float the idea of an acquisition. Maybe it started with a partnership in which both parties got to know each other and explored the value your company’s solution brings to their portfolio and their customers. Perhaps someone from the Corporate Development team contacted you as part of their search to fill a product or market gap. Or maybe you engaged an advisor to help you sell your business. In any event, both parties are interested in discussing an acquisition.
What to Look for in an M&A Advisor
We previously discussed some of the most important learnings we gleaned from selling over 100 businesses over the past 25 years. In this article, I discuss the things you should look for when deciding which Advisor to hire. There are a number of important issues to consider. Here are the 5 most important