Last week, I shared five tips to help you best position your company for a market exit. The key I focused on was making preparations before an opportunity presents itself, so you can maximize the likelihood that the opportunity materializes in an acquisition offer.
This week, I will share three tips on how to start developing exit opportunities before your management team is seriously looking to exit the market.
Inbound inquiries don’t just happen over-night. They are generally the result of strategic market exit positioning and strategic relationship building that begins years ahead of an exit (See my case study on the Motorola exit).
Below are three tips for building awareness amongst potential acquirers as you develop your company’s market exit strategy:
1) Build strong relationships with key customers that could potentially acquire your business
Regularly meet with them to talk and build strategic alignment.
This does not mean building customized functionality for them; rather, focus on simply building a strong customer relationship and show how great your company is. Customers can often be some of the best acquirers. They have firsthand exposure to your company and can see it for all its greatness.
2) Build strong relationships with business partners and technology partners
These are organizations that have keen insight into your operations and can often perceive the most value in your business. These relationships can also help introduce you to their partners, which can lead to additional exit opportunities.
3) Network, network, network
Just as with any sale, the sale will not happen if the buyer is not aware of the company or the executive team.
Note: You Do Not Need a For-Sale Sign to Get Attention
It is important to note that you do not need to tell your potential acquirers that your business is for sale. They know that all companies are for sale for the right price. Some companies just have extremely high price tags that would scare away most if not all inquirers. Sometimes the lofty price is the result of growth expectations and other times it is due to outside factors like personal attachment to the business or a personal diatribe to succeed (think Steve Jobs).
Similarly, if you are interested in learning more about early-stage market exit strategy, I highly recommend reading Early Exits: Exit Strategies for Entrepreneurs and Angel Investors by Basil Peters.