Did you know that the vast majority of acquisitions happen in the sub $50 million valuation range? The best way to make money off such acquisitions is to build a startup with capital efficiency. If you can bootstrap, great. If not, raise small amounts of money so that you own a large percentage of the
As the new year begins, entrepreneurs need to think about new year resolutions. Perhaps you have come to the conclusion that you will not seek further funding. Instead, you will look for an Exit. Now you have to show potential strategic acquirers how they can quickly drive revenues by pushing your product through their existing
Sramana Mitra: In smaller acquisitions, what role does valuation play? Seong Kim: It really depends on why you’re acquiring the business and what you’re ascribing the value of the business to. The role of valuation is always prevalent and important. The needle gets moved by the conviction that an acquirer is able to build around
Sramana Mitra: What have you disclosed on the valuation on this most recent acquisition? In general, how do you think about valuation? How does valuation play into your acquisition decision? Seong Kim: The valuation of this deal was approximately $436 million. This is based in London and Madrid. It’s definitely a key factor that impacts
Sramana Mitra: I’m going to double-click down on your second category. You have product-market fit. The options are, do we sell the company now or do we go for another round of funding. If we choose to go for another round of funding, we will get funded because we have product-market fit. In that scenario,
Sramana Mitra: Is the driver in that acquisition strategy upselling from your current user base and giving them more products to get into? Seong Kim: Yes, it serves the two purposes that I alluded to before. It expands the suite of products and services and support we can offer to our existing base. It also
Sramana Mitra: What role does valuation play in whether an acquisition happens or not? Seksom Suriyapa: This is a tough one. The reality is that it tends to be the issue of whether a deal happens or not. Very professional corporate development teams are highly disciplined around how they value deals. Similarly, in the case
Sramana Mitra: Let’s take this example that you started with. Who drives acquisition? Is it product leaders or corp dev? How do you find about this company that you ended up considering an OEM deal with that led to an acquisition? Seksom Suriyapa: In a very perfect world, I advise that product leaders should drive