Myth #1: Good companies are bought, not sold?

Recently at a regional tech M&A panel, I heard a fellow investment banker say “Good companies are bought, not sold.” He went on to explain that you should just go hang out with the companies who might be potential partners, let them to get to know you, and when the timing is right your phone will ring with a big offer, one you can calibrate with their competitors. When I cried out “nonsense!”, this panelist quickly admitted that he was not from the transaction side of the investment banking house, nor had he ever built, let alone sold, his own software/IT company. He was a finance wonk off of Wall Street.

Myth: If you build it, they will comeThis whole logic is like saying “If you build it, they will come!” This works in the movies; everybody else needs marketing and sales. The problem is that the believers of this myth are waiting patiently for the phone to ring, missing the best tech M&A market in a lifetime. And, if it does ring, all too often the caller is some bottom feeder dialing for a deal.

Look, we all read about the high flying company, usually heavily VC-backed in Silicon Valley, who gets a record setting offer, seemingly out of the blue. The reality is that the partner was in mind with the Board from the very the first mega-financing round. For the rest of us, entrepreneurs who have worked so hard to build value into our company, you have to control your own destiny in order to get an optimum value.

In future blog posts, we’ll take a look at how you do that, first by explaining 6 reasons why this myth is so dangerously wrong

Posted by , CEO on 9 May 2014
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