Seasoned Technologist and Serial Entrepreneur | AI Strategist | Seed Investor | CTO | Championing Growth in AI-Enabled Startups
Before starting to examine the strategic questions that an acquirer will ask, you need to understand whether you are looking at a financial or strategic buyer because the goals will be different. A financial buyer is looking at the cash flow of the business. They're looking to generate a return from the investment based on the profit and associate growth. Financial buyers will care more about growth metrics, cost of goods, and overall profitability, i.e. objective measures. A strategic buyer is looking at how it fits into their operation. While they may still care about financial metrics, the real upside for them is based on how it helps them sell their core products and services and even help that growth. Strategic buyers will care more about how complementary you are, i.e. subjective measures. The reason it's important to understand the two is that the former is likely willing to pay less to acquire a company than the latter. https://lnkd.in/ghfwB4de
Great post David Evans, keep it up!
Business and Partnership Development Executive | Customer Journey Expert | Brand and Product Innovation | Sales Strategy | ᗰEᔕᗩGIᑎG | 𝔼𝕩𝕡𝕖𝕣𝕥 𝔾𝕖𝕟𝕖𝕣𝕒𝕝𝕚𝕤𝕥 | 𝖢𝖯𝖦-𝖱𝖾𝗍𝖺𝗂𝗅-𝖳𝖾𝖼𝗁-𝖠𝖨 | ʙ2ʙ2ᴄ ᴄᴀᴛᴀʟyꜱᴛ
2wDavid- Therefore is a strategic buyer always the best buyer to sell to? What do you consider the confounding factors? Timing? Need?