A talk about Why and How M&A deals happen from the perspective of the Corporate. and some tips on how to avoid "Oh shit moments"

2. ADV & MSFT ACCELERATOR
L&L - M&A DEALS
HOW DO THEY HAPPEN AND WHAT DO CORPORATES
REALLY WANT

3. QUICK OVERVIEW

4. 1. Who am I & why am I here
2. Why do corporates buy companies
3. How do deals happen
4. How to avoid “Oh Shit Moments”
TODAY’S PRESENTATION

5. [1] WHO AM I?

6. Investor @ADV
8 Years12 Years

7. ADV SOURCES, SUPPORTS AND SUPERCHARGES UK DIGITAL TECHNOLOGY BUSINESSES FROM ENTRY TO
EXIT
STARTUPS STARTUPS SCALEUPS SCALEBIGS SUCCESSES
PRE-SEED SEED VENTURE GROWTH EXIT
Invest in microfunds,
accelerators and incubators
Co-invest via
accelerators; co-
invest with angels
and VCs
Co-invest with
VCs
at Series A-B
Co-invest with
institutions, VCs
and Corporates at
Series C and
beyond
Support
companies to go
through sale and /
or IPO

8. [2] WHY DO CORPORATES BUY COMPANIES

9. A FEW REASONS

10. YOUR TECH

11. YOUR TEAM!!

12. YOUR TEAM!!YOUR CLIENTS

13. AND HERE ARE MORE REASONS
To enter a new market
Industry / vertical /Geography
New Product
to sell to their clients
Cheaper than…

14. YOUR TEAM!!AND PERHAPS TO KILL

15. All depends on their POV

16. [3] HOW DO M&A DEALS HAPPE

17. HOW DO M&A DEALS HAPPEN
Buy side Sell side

18. NOT GONNA COVER THIS TODAY

19. BUT HERE ARE
A FEW THINGS
TO KEEP IN MIND

20. IT’S A

21. IT’S A SIGNAL

22. BRING IN AN EXPERT

23. BE OPEN – NEW BUYERS CAN COME

24. BUY SIDE
THEY WANT
YOU

25. Opportunistic Targeted
2 TYPES

26. Opportunistic
< 0.1%
Targeted
99.9%
2 TYPES

27. Opportunistic
< 0.1%
Targeted
99.9%
2 TYPES

28. WHY?

29. Corporates

31. TARGETED
BUY SIDE

32. 2 ways to get there

33. Already work together

35. FIT
NEED
STRATEGY

36. THEY HAVE PEOPLE MANAGING THE
PROCESS
INTERNAL EXTERNAL

37. THE PROCESS FROM THEIR SIDE 1/2
1. Understanding internal strategy
2. They see a tech/product/company
they want
3. Market research and Long list of
companies
4. Short list of companies and deep
dive
5. Modelling excel [A lot]
6. Referencing of product and team
BEHIND THE
SCENES

38. THE PROCESS FROM THEIR SIDE 2/2
1. Get to know you meetings [3-10]
2. Starting to work together – POC/Pilot [3-9
months]
3. Signing a contract - Working together [6-18
months]
4. They make good revenue with you and see they
can make shit tons more
5. Internal alignment and discussions -3-6 months
6. A lot more excel modelling !!!!
7. DD and discussions
WORKING
TOGETHER

39. The more mature your
business

40. [4] HOW TO AVOID “OH SHIT MOMENTS”

41. KNOW WHAT YOU WANT
£££

42. THIS
WILL
TAKE
TIME

43. DON’T BE A
HERO
USE AN
EXPERT/YOUR
INVESTORS

44. EGGS 1 BASKET - TALK TO MANY
BUYERS

45. A SENSE OF
URGENCY IS KEY

46. IT’S ALL ABOUT
RELATIONSHIPS

47. DON’T IGNORE YOUR [MINORITY] SHAREHOLDERS

48. CONTRACTS WITH CHANGE OF CONTROL PROVISIONS

49. SPLITTING A CAP TABLE - NO

50. NEGOTIATIONS POINTS
• Bad cop: Use investors, your board, the team
and God as a foil to avoid putting yourself in a
corner
• Desperation: Never ever share that you are
running out of money or options.
• Every point of contact is a sales
opportunity: Every single email, call, tweet,
text or meetup with anyone at the acquiring
company is a chance for you to make your
case.
• Valuation Game: Safest answer “We are
going to let the market decide so give us
your best offer”. They will push you to go
first but resist unless you are pre revenue ->
Anchor!!
• Don’t lie: Everyone exaggerates but don’t
make shit up
• Transparency cuts both ways: Of course
buyers want to know the truth about your
biz, BUT so do you, so put the buyer on
notice at the start of the process. Tell them
you expect regular and open communication
as a sign that the deal is progressing.

51. THEY
MAY END
UP
SAYING
NO

52. THANK YOU
ANY QUESTIONS?
@fogeldavid
davidf@accelerated.ventures