Bruce Milne

Look, you've worked hard to create value - often more than you realize. Remember, it's not just about technology. There are so many other factors about your business model and hidden assets that can unlock value.

The right price and structure is created by a detailed process professionally done. In the age of Sarbanes Oxley and much tougher legal and accounting advisors, due diligence is fraught with land mines. So, you have to be ready.

Statistically firms that try to sell themselves, without professional preparation and research, have a failure rate of 80%. Only a 20% chance of success. Don't let that be you.

Here's "8 steps to an Optimal Outcome" that will turn those odds around, and get a better price and structure.

First off have iron clad preparation, followed by extensive research. Leave no stone unturned in terms of buyers, contacting and vetting them.

You must go global. A lot of the buyers today are international, are non technology, or portfolio companies of PE firms. About 40% of your interest will come from what we call the B list of buyers - often firms you've never heard of that help you leverage your value up.

Premium values are created by having the right professionals on your side in valuation, negotiation, and contract preparation. “You don't know what you don't know” is a phrase we are all well aware of. In tech M&A, it kills deals.

This is no time for home brew approaches - dealing with only one buyer. If you do it right, go through a professional global search process for your partner, you get what you deserve for your years of hard work.

75% of the time, there's other buyers willing to outbid the first party who approached you to.

Bidding is the key here - by leveraging interest from a range of bidders, you create an auction environment. The result is extraordinary. You can expect to get an average of 48% more for your company over dealing with just one buyer. That 48% more liquidity - as in funds in your pocket. Most deals are for cash these days. Those early low ballers who try to do structured deals with earn out, notes, private stock, etc. quickly get washed out of the process by better bidders.

So do the job right. This is the most important transaction of your life.

Timothy Goddard

Thank you, Bruce.

Before we go to Q&A, I know that even after all that, there are still some of you in the audience saying, “In my case I really have the right buyer, the right buyer is at the table, I just need to push this over the finish line.”

Power Positioning

I’m going to hand this over now to Corum Chairman Ward Carter who has an anecdote about one of those rare situations and what that means, given everything that Bruce just went over. Ward?

Ward Carter

We fully recognize the virtue of having multiple buyers at the negotiating table to get full value. What happens when you don’t have those multiple bidders? It still makes tremendous sense to create the semblance of multiple bidders to leverage the buyer. We recently had a situation where our client had a tentative offer from the giant in their vertical space and there was a strong fit, given that both parties addressed different segments of the same market. There were few other options for the buyer, and our client represented by far the best solution.

Our client was also not actively looking to sell and saw holding on as a viable long-term option. We established valuation benchmarks for similar high-growth, high-EBITDA SaaS companies. We knew we were the best option for the buyer, so we were able to be aggressive on valuation and also send the message that we were ready to walk if this buyer failed to execute, as we had other options, including selling to the buyer’s competitors, who we were prepared to approach.

In the end, the buyer agreed in the face of compelling logic that they were better off buying an existing solution, obtaining not just the technology, but the customer base, the team, the recurring revenue, along with domain expertise and brand, than to spend time and money on developing a competing solution.