Common Mistakes that Unknowingly Kill a Tech M&A Deal

Google, Yahoo, Microsoft, LinkedIn etc. currently get between 6 and 12 inbound proposals a day – not including the companies they proactively reach out to. Their time is very short, and they rely heavily on first impressions. If they get spooked, they walk away. In the current market it is therefore especially important to be crisp and effective and to avoid mistakes. Thus, I’ve compiled a list of common mistakes that can kill a deal:

  1. Unsupported valuation expectations. If a buyer asks you how much you want for the company and you give them a ridiculous number, you have branded yourself as an unreasonable person and your company as toxic. You will find it hard to reopen the door.

  2. Obvious lack of alignment among shareholders. If the buyer figures out that some shareholders want a high valuation and others would sell cheap, they will find it hard or impossible to ever agree on a valuation. Plus, they’ll also worry that the deal won't ever close, because the shareholders won't get together on all of the other deal elements that require consensus.

  3. Failing the job interview. Corporate Development veterans focus largely on team and fit. Many CEOs fail to recognize that the first meeting is actually an intensive job interview. Thus, it is important to prepare, to be crisp, and to understand how these companies interview. If you haven't worked in these environments, talk to someone who has.
Common Mistakes that Unknowingly Kill a Deal
Posted by , on 18 June 2014
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