During our most recent follow-up calls, I spoke to a Founder/CEO who was pleased to receive our latest valuation report (he is a long-time reader of Corum material), and also informed me that he had recently retained the services of a competing M&A advisor to sell his company.
Of course this is always painful to hear, but as he elaborated about the situation and the credentials of this advisor, I became even more concerned.
This Founder/CEO told me that he had hired his M&A advisor based on price alone. He was 1/3rd the cost of some of the competing boutique advisors, and while he hadnt ever done a transaction in the software/internet space, he had completed other transactions of traditional business lines. Along with the lack of experience in software M&A, this advisor also had no team to support him a classic Guy-and-a-Dog scenario.
Now I'm concerned. This is not a blog post meant to slam the 1-Man M&A Shop, but in todays world an advisor like this is far more capable of doing harm than creating success for the exiting company. There are simply too many variables, too many demands for resource, too many potential mistakes to be made in this process to have it done by someone who has no experience in selling a software company.
Message to CEOs: This is the most important transaction of your life. The vast majority of Founders/CEOs only go through this once. They build their company for 5.. 10 15+ years before deciding to take the company to market. You are far more likely to sell your home multiple times. You are far more likely to sell your car multiple times. Chances are, you will only sell ONE company in your lifetime. If this is your ONE shot to create true wealth for yourself and your family. If this is your ONE shot to build a credible reputation for your creation, for your innovation, for your business savvy. If this is your ONE-and-only chance to successfully exit your company, are you really willing to risk it on the guy who is 1/3rd the price? Or would you rather trust the sale of your company to the most experienced software M&A advisors in the industry?