Ask HN: How to pursue acquisition?
So first off congratulations to creating a business that makes customers pay $200K per year. That&#x27;s amazing. There are companies out there that raise many $M, hire a bunch of engineers, and still don&#x27;t get there.<p>I may be able to add a perspective here since I&#x27;ve worked on both sides of the table, in Corp Dev (before) and as a founder (today).<p>If you want to find an exit for your company, then it&#x27;s &quot;just&quot; another sales process. That means you need to define your process, set a timeline, and create urgency among potential buyers. That means filling your pipeline with lots of prospects. In a way, it&#x27;s like fundraising - you&#x27;re trying to sell (a part of) your company.<p>Key is that you have a large top of the funnel - more people will say &quot;no&quot; than &quot;yes&quot;. And for the ones that say &quot;yes&quot;, you want to make sure that you have leverage, i.e. more than one offer.<p>Here&#x27;s the rough process that I would pursue if I were in your shoes:<p>==========<p>- create a long list of companies that may be a good fit &#x2F; home for your product (20+ companies)<p>- find their CEOs and their emails (e.g. via a freelancer on Upwork)<p>- get a warm intro (best), otherwise reach out cold<p>- prepare a general pitch (market changes, need for your product, etc.)<p>- do you homework to understand how your product would fit into their portfolio<p>==============<p>The first contact should only be about the potential opportunity - &quot;xyz thought what I&#x27;m doing may be a good fit for your company. If I sent you a short deck, would you spend a few minutes looking at it?&quot; ----&gt; if yes, send and propose a 30 min chat<p>Do this for as many good potential buyers as possible, all within a few days. Schedule the coffee &#x2F; call for the week after. Prepare that deck that you can send if somebody is open to talk &#x2F; meet.<p>in the deck:<p>=============<p>- describe a big change in the market that has created a need for YOUR product<p>- make sure you nail the &quot;why now?&quot;<p>- explain your product&#x27;s secret sauce and why it&#x27;s unique<p>- show your traction, customer logos<p>- explain your economics (e.g. &quot;ASP $18K &#x2F; year&quot;)<p>- show what the business can look like if you join forces<p>- put a price on it<p>============<p>Keep this deck small. 6-8 pages max.<p>Make sure you communicate that you&#x27;re looking to find a buyer within the next 6-8 weeks (urgency), and that you&#x27;re talking to a few good companies (fear of missing out).<p>If you feel there&#x27;s a fit, and the other side believes that too, work with the CEO to identify &amp; involve the stakeholders on their end (e.g. VP of Product, VP of Engineering). Make sure that happens as a follow-up within the next week of your chat &#x2F; coffee with the CEO.<p>If they all decide it&#x27;s a fit - agree on the process and timeline it will take to close. They&#x27;ll need to get approval from their board, etc. to get this through. So much can go wrong here. People go on vacation. There&#x27;s an important release. The quarter is ending, and they missed their quarter. That&#x27;s why you need many potential parties in your deal.<p>So:<p>first contact --&gt; call &#x2F; meeting --&gt; get ok from stakeholders --&gt; come to decision &quot;is this a fit&quot;? --&gt; agree on closing steps<p>Reg. the price - there are few well-known small PE buyers out there that will pay your 1x revenue regardless of what your business is. Take that as the bottom of the valuation. To get something that&#x27;s higher - you&#x27;ll need competing parties for the deal.<p>But I doubt that anybody will buy you for the revenue. $200K is too little for any company to matter, regardless of small &#x2F; big. So the important part is to communicate the potential, and your value-add as an individual contributor for say the next 12-24 months. But you don&#x27;t know until you try and ask :-)<p>Hope this helps. and then look at <a href="https:&#x2F;&#x2F;www.intermix.io" rel="nofollow">https:&#x2F;&#x2F;www.intermix.io</a> to and let me know if we&#x27;re a potential fit :-)