We wrote the book on it
Need general guidance on strategic exits?
Here’s how it works, from start to finish.
Adjust Your Focus
Most startups think buyers will be interested in their customers, revenue, and opportunities to expand the same. The reality of strategic.
Identify Key Capabilities
What are the 3 or 4 functions that your product or team performs particularly well? Valuable capabilities can be market-facing or internal, broad or narrow. The test for notable capabilities…
Identify Use Cases
How could an acquirer use your capabilities to generate new revenue, retention, or cost savings? Having 3-6 use cases will help you identify prospects, quantify your value, and articulate your…
Identify Segments
What types of companies would have my use cases? Brainstorm as many segments as possible. You can always cull them before outreach, or during outreach if you are getting a…
Calculate Your Value
How much value does my company create for an acquirer? A key to strategic acquisitions that value is subjective, relating to the use case for a specific acquirer. A subjective…
Understand Value Friction
The buyer will not be willing to pay the full value you calculate. That’s partially because they are anchored to different figures. Every purchase is discounted by risk (of value…
Rank Your Prospects
Determine which prospects are your best prospects by factoring Value, Propensity and Fit. At Inorganic we have three calculations that we run to rank prospects. Value is the formula presented…
Identify the Right Contact
Who is the right person to contact at a prospective acquirer? There is a simple rule for the right contact at an acquirer. If the acquirer has a Corporate Development…
Craft the Right Message
The right message makes it easy for your prospect to engage. Strategic acquisitions are risky and time-consuming projects for acquirers. The path of least resistance is just to move on…
Start Your Outreach
Email is the standard for strategic outreach. A few guidelines will help maximize your response. Sequence your outreach in order of highest ranked prospect to lowest ranked. If you get…
Come to Terms
Congrats, you have one or more interested parties. Now it’s time to negotiate terms. In the case of early-stage strategic exits, the plan for your business is to fold it…
Due Diligence
Diligence is typically a 1-2 month period during which the buyer can review company materials to verify claims. During this period, you will be asked to upload documentation to a…