Selling a company – or better yet, having a
buyer make an attractive offer – is the end goal
for many startups. According to a recent survey
by Silicon Valley Bank, half of British startups
expect to be acquired at some point. Selling a
controlling interest can also help founders take
their business to a new level, thanks to a fresh
injection of capital. Nine in ten founders say they
think the mergers and acquisitions market would
grow or stay the same size in 2019, regardless of
Brexit uncertainty. WIRED asked those who have
been on different sides of deals to highlight the
pitfalls a savvy startup founder should avoid,
and what they’d have done differently, if they
had a second chance... Chris Stokel-WalkerTHE SELLER-
TURNED-INVESTOR
ILKKA KIVIMAKI,
MAKI.VCcurrent: partner at Maki.vc,
a venture capital firm
experience: sold telco
firm Wicom Communications
to SAP in 2007
“You should be looking at all
the stakeholders, asking
what it means if the company
is sold. That includes the
staff – it’s very important that
you chart a path forward for
your employees. But it’s also
the investors. Early investors
can get five or ten times their
money back. But late-stage
investors, who came in a
year ago, might think it’s the
wrong time to sell.
Keep it quiet. If a company
gets an offer or you’re in
the process of selling, it can
be a major distraction if the
whole company is focusing
on that. For the SAP sale,
we’d negotiated all the terms
and were ready to sign before
we told staff. Most people
saw it as an opportunity
to leverage their expertise
in a wider organisation, and
we got access to resources.
Buyers will try to push the
price down with due diligence- it’s totally normal, so don’t
get super upset about it.”
current: founder of Quill
content production platform
experience: serial
entrepreneur and exiter
“It’s better to be bought than
sold. If you get your business
to a place where it’s being
acquired – driven by the
market rather than the need
to sell – that’s the best place
to be in terms of pricing.
Build relationships [with
prospective buyers]. You
need to know what your
eventual buyer set is, and to
build contacts with the buyer
group, through conversations
and coffees. The process
itself takes six to 12 months
and, unless you’re properly
supported, it can materially
impact the business.
I’ve seen this directly and
indirectly through peers:
inevitably you get drawn into
a huge number of meetings
with a lot of detail, juggling
a lot of balls and you’re ripped
out of the business. If you’re
not properly backfilled and
supported, it can affect the
performance of the company.”THE SERIAL EXITER
ED BUSSEY,
QUILLEXITINGYOURSTARTUPYou’ve spent years growing your
business – but now you want to sell.
WIRED asks veteran investors, founders
and experts how to get the best dealCASHING OUT CLEVERLY WORK SMARTER11-19-WSopener.indd 53 09/09/2019 09:01