A naukri.com initiative
Medium
1M
393
Image Credit: Medium
Navigating an M&A process as a seed stage company
- The early stage M&A market continues to tick up slightly, but it is still a slower time for exits, with pre-seed and seed stage companies as the most common targets.
- Startup founders should build relationships as early as seed stage with later-stage players and strategic leaders in their verticals to potentially result in future strategic partnerships or customers.
- Startups considering an M&A exit should prepare materials for their data room in advance and stack rank potential acquirers to drive momentum and competitive offers.
- Context of what a deal might look like in a startup's situation and in the current macro environment should be understood when deciding to move forward with an M&A exit.
- Early stage M&A deals are usually founder-led, and the deal team includes the founders, their legal team, and their board of directors/board chair, if the company has one.
- Keeping an open line of communication with investors during an M&A process is important; investors can be a helpful member of your deal team and emergency bridge capital source.
- Negotiating key terms upfront during the term sheet stage helps to lessen lengthy negotiation cycles later.
- Navigating the M&A process as an early-stage company is not giving up on the company vision; it's about being strategic, prepared, and open to opportunities that accelerate company growth.
- Following the tips mentioned in the article can position early-stage companies to seize opportunities and achieve the best possible outcome for the company, team and vision.
- M&A deal activity on Carta increased by 10% in Q4 2023 over the previous quarter, then increased by 5% in Q1 of this year, and another 4% increase in Q2 2024.
Read Full Article
23 Likes
For uninterrupted reading, download the app