Strategic Corp Dev Playbook: How to Improve Your Odds of Being Acquired
Special thanks to Kyle Poyar for helping to compile this article and deck.
CEOs and executive teams at fast growing software companies are busy. Really busy. Heads down, executing the day-to-day processes and bringing great products to your customers is all-consuming. But that’s not their only job. Teams also need to be picking their heads up – if even for a few hours each month – to create strategic optionality for the business and shareholders (and employees).
Even though everyone wants to remain independent, hit the public markets with an IPO, rather than “sell,” the fact remains that only a small fraction of companies make it to the public market promised land. Over the past two years just a handful of software companies have gone public, despite there being thousands of companies that have taken funding. Far more have been acquired, including heavyweights like AppDynamics ($3.7B to Cisco), Demandware ($2.8B to Salesforce), Fleetmatics ($2.4B to Verizon) and ServiceMax ($915M to GE Digital).
Don’t fret – being acquired (not “sold”) can be a great outcome (in many ways, better than going public). And besides making your business attractive through strong business fundamentals and products, there are steps and activities you can (and should) take to improve your odds. It’s all about building relationships and planting seeds across your ecosystem to elevate awareness. Best of all, you should be doing this anyway – to look for new business expansion and partnership opportunities.
Take Fieldlens (in which OpenView invested), recently acquired by WeWork. With the company having developed a game-changing mobile solution for the construction industry and gained great customer traction, CEO Doug Chambers was plenty incentivized to remain heads down, executing and building. But he took a more prudent, long-term perspective, and set aside time to partner with OpenView for more than a year to develop his contacts and relationships with logical partners and acquirers.
We carefully curated a tiered target list, developed messaging, and went out to tell Fieldlens’ story and explain the strategic fit specific to each party. We were building relationships and engaging in informal mutual partner education – not running a ‘sale process.’ Mostly, we explored go-to-market alliance angles and shared ideas. Born out of these activities were a number of close relationships, including with WeWork. One thing led to another, and FieldLens was in a position to make a decision. We had created optionality.
We’ve pulled learnings from this process and many others across our portfolio to create a Strategic Corporate Development Playbook. It outlines a set of activities CEO’s can take to generate buzz, create optionality and position their company for a successful outcome, without putting up a for-sale sign.
In this playbook you’ll learn:
- The key steps you should be taking right now, and in what order
- How to build a corporate deck that generates buzz around your company
- How to identify and prioritize the target acquirers for your business
- Ways to break in, including email templates that have worked for others
- The right time to engage an investment bank and what to look for
Did you find this playbook to be useful? Let us know in the comments, we’d love to hear from you!
Use this as a guide for controlling costs, getting to cash-flow positive and extending your runway as quickly as possible.
Companyon Ventures enhanced our Expansion SaaS Benchmarks Data Explorer by building the accompanying SaaS Benchmarks Modeling Tool to measure the current and projected performance of their portfolio against other high-performing SaaS startups. Check out the tool here.