Last week, I caught up with an entrepreneur, discussing how things were going with his startup. We delved into the usual topics, sharing what we’ve learned over the years. A question arose: “What should you do to prepare for selling your business in the next couple of years?” After pondering, I shared a pivotal course of events before a highly successful exit.
The eventual acquirer, a holding company with a diverse tech portfolio, had one of its companies become our customer. Their positive experience led to a referral to another portfolio company. Gradually, several more became customers. Recognizing the value, the holding company decided to integrate our solution into their playbook for all subsidiaries. As we continued to excel with more portfolio companies, we became the obvious choice for acquisition. We were a) a preferred vendor, b) already integrated into multiple subsidiaries, and c) standardized in their operations. This made the acquisition a seamless, win-win situation: they knew exactly what they were getting and how to leverage it for future growth.
While there’s no surefire strategy, having your software adopted as a standard by a business or strategic partner can create a strong acquisition opportunity. My advice for entrepreneurs is to look for ways to deeply embed their products or solutions in a manner that’s more than a standard customer/vendor relationship. This not only strengthens your market presence but also opens doors to a potential acquisition in the future.
Entrepreneur
via https://www.aiupnow.com
David Cummings, Khareem Sudlow
