Tech M&A Myth #6: Going to Market Too Early Can Hurt My Value

Let’s go way back, to Baron von Rothschild in France a couple of hundred years ago. He was quoted as saying, “I made my fortune by always selling too early.” Now let’s fast forward to the dot-com era. We sold two enterprise fax businesses in the space of about three months, took a third to market, and it was crickets. Tumbleweeds were blowing down the street. The window had closed.

 

The trouble is that these windows open, the M&A process takes time, and you need to be in traffic making something happen, or the opportunity can pass you by. We have lots of other recent examples of this. We sold a company to Quarterdeck years ago, literally a month before Microsoft incorporated memory management into the OS and made them obsolete. That was $135M transaction that could not have happened two months later.

 

We’re happy to spend a few hours giving more examples of those unhappy endings, and then many other examples where people got into traffic and got stuff done when there was time. The fact is that we’re not damaging companies by being in the market, every good company is looking for ways to get bigger, to play on a bigger stage, and to do that with the help of a larger partner. If you do that professionally and carefully, you’re not going to hurt your value.

For a confidential look at your opportunities in today's market, contact Corum Group today.

Posted by , on 9 September 2014
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