We deal with buyers who are ready to buy and sellers who are ready to sell. (Check our Founders Readiness Programme (FRP) for more details).
Termsheet has a network of 500+ Qualified Investors (Qualified Investors Network). Every Investor / Buyer is exhaustively vetted before we put them in touch with the sellers. Our qualification process is based on three Parameters:
Clear Acquisition / Investment Strategy
Direct involvement of leadership (CEO, CFO, Chairman or Strategy Heads) in the process
We don’t deal with buyers who doesn’t have time for the inorganic growth activities
Proof of funds
Strategic buyers often seek an acquisition target for its technology offerings, capabilities and future market potential. The goal is to incorporate the target’s assets into their existing distribution channels.
Additional motives to acquire are to:
1. Win specific customer accounts.
2. Gain entry into new markets.
3. Acquire a talent pool (AcquiHire).
Buyers typically don’t need to buy a business for its P&L, unlike a financial investor that needs a business that is already cash flow positive on a standalone basis.
TermSheet has a large network of global strategic buyers across sectors.
Financial investors are stepping up and becoming a lot more competitive with strategic buyers. Cash-rich Private Equity firms are bidding up prices to win deals due to the recently increased availability to capital.
PE firms looking for platform companies will usually target businesses that are beyond the cash flow crunch and in a steady growth state (stage 3 above), looking to add fuel to the fire. But these firms are also increasingly looking at smaller software companies (stages 1 and 2) as add-ons or bolt-ons.
Family offices often have a competitive advantage over committed funds with aggressive time horizons that may not fall in line with the scalability and timeframe of the business.
Many family offices and Individual investors are CXO’s of large Technology companies and have found their niche in the technology space by focusing on companies experiencing a cash flow crunch (stage 2 above), especially those where the founders might want to stay on or where the founders are playing along game regarding their growth prospects. Similar to venture capital firms in some sense, family offices can also be less bureaucratic and therefore more flexible to write a smaller check, with an interest in seeing a path to put more money to work overtime.
Buying a business is a complex process that requires expertise in researching and identifying acquisition prospects, initiating conversations, and recommending strategies for making an offer.
A buyer might adopt one of the following strategies while running a process to acquire a business or strategically invest in a business:
Rollups and Consolidation Strategy:
A rollup or consolidation can spark rapid, robust growth. Acquiring multiple small companies and merging them into a single entity requires creative thinking, expert coordination and negotiation. For more than 15 years, we have been successfully providing business growth services to middle-market investors.
Business Growth through acquisition:
Growth through acquisition is a complex process. It involves strategy, planning, critical analysis, coordination, and negotiation. Learn about the steps in the buying process and why having an experienced investment banker as your partner can make the difference between a stalled transaction and a closed deal with a far brighter future.
Growth or Diversification Strategy:
Once you have decided to grow your business through an acquisition, the next question is one of direction. Do you buy a competing company or look to a synergistic business opportunity that can add value by diversification? TSC can help you navigate these important questions and arrive at a direction that works best for you.
Management Buy Out (MBO) Strategy
Engineering an MBO may be an effective strategy for both an existing management team seeking ownership and an owner seeking an exit. MBOs tend to cross the finish line sooner, remain highly confidential while providing an opportunity for management to take the company to the next level.