It's Not Too Early to Sell - 5 Major Benefits

We are seeing record attendance at our Tech M&A conferences around the world, and record activity in high value deals. Yet there are still companies sitting on the fence, wondering if it is the right time to sell, questioning if they will get hurt going to the market too early.

They’ve heard the horror stories of firms that botched trying to sell themselves. They’re right to be extra careful; after all, the sale of your company is likely the most important transaction of your life. However, there’s no problem to go to market early, and you don’t want to miss the window to sell. But, you need to do it right.

In Corum’s 28 years of representing only privately held software, IT and related tech firms, our 8 Step Optimum Outcome process has resulted in more successful sales than any in history. We’ve learned there are five major benefits, if you follow the principles of this search process, any one of which justifies the exercise.

  1. Better, more profitable, business model by going through self-checking due diligence, mapping the company to best business practices.
  2. Improved company strategy from extensive industry research. By objectively comparing your product/services to the competition and what the buyers want, the exercise will make you stronger, better positioned to win.
  3. Extraordinary market feedback from all of the buyer contacts made. M&A is the only time you have the right to go straight to the top with your message “Do you want to buy me?” It gets the CEO’s careful attention; after all, most tech buyers are just a large collection of acquired companies. They have a bigger stake in your market (R&D, large user base, global distribution) and can give you invaluable input on the market, how they see you competitively, quality of products/sales/support/etc. This is invaluable stuff you can’t get any other way.
  4. Doors opened for new business. As we discuss in our Merge Briefing conferences, not everyone is a buyer, but many parties that go under NDA could easily do some form of product, joint venture or marketing partnership that will strengthen your offering, raise your revenue, and increase your value.
  5. A strategic partner transaction - buy, merge, asset sale, recapitalization, or investment.

Obviously, you are working toward #5, but any of the other 4 benefits are worth the time and expense of the exercise. The better model, refined strategy, market feedback and alliances you gain will allow you to reposition, grow and later sell for an even greater value.

Hope you take advantage of today’s Sellers Market. Good luck.

Want to know more? How to execute the most important transaction of your life – sale of your company? Learn about Corum’s 8 Step Optimum Outcome process in a Merge Briefing seminar near you. The goal of this conference is to help you reverse the 80% mortality rate that ‘self managed’ M&A efforts suffer, often because of today’s tougher due diligence, lack of a true global search, inadequate inside information on buyers, poor preparation process and improper negotiation handled by junior staff.

Posted by , CEO on 9 April 2014
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