Acquisitions are a difficult phrase for buyers and sellers, the space is opaque, there are trust issues and no one is really sure if the other party would be keen to explore one. The benefits though far outweigh these challenges, from enabling innovation to meet distribution, fantastic founders joining a stable company or the liquidity it can create for individuals. Done Deal is built to address these challenges, by removing the stigma of being “listed for acquisition” by ensuring anonymity and allowing corporates to express interest in you to have a conversation. We have spoken to hundreds of sellers and buyers over the last few months, trying to synthesize what buyers have found interesting in some of these startups, and why they are pursuing these conversations actively
Innovation
One of the top priorities for buyers is the innovation that a startup brings to the table. Whether it's cutting-edge software, a groundbreaking app, or a revolutionary process, innovative technology can provide a significant competitive advantage. Buyers are eager to acquire startups that offer unique and valuable intellectual property. They could have built these internally, but internal priorities usually trump experimenting. Startups thrive in this environment, and corporates can cash into these ideas when there is some PMF, and at a valuation that leaves enough upside for both parties.
Done Deal perspective : Filling out a description that succinctly captures what innovation your startup brings or adding it in the “What Buyer Gets” field will increase the chances of a buyer expressing interest in your company
Strong Market Potential
In a world that is rapidly evolving, from the way e-commerce has exploded in India, to the impact generative AI is having on traditional businesses. Corporates are often on the lookout for startups with a promising market potential. This includes a substantial and growing target audience, a clear value proposition, and a scalable business model. A startup's ability to demonstrate a robust market demand for its product or service is a significant selling point.
Done Deal perspective : Early demonstration of this is through the numbers - customers, revenue and ratings, make sure to highlight these in your anonymous description
Talented Team
The startup's team is a critical factor, if not, sometimes the leading factor behind an acquisition. A skilled and motivated team can ensure a smooth transition and continued success post-acquisition. It's not uncommon for buyers to "acqui-hire" the startup's team, recognizing the value of their expertise.
Done Deal perspective : Founder pedigree and team size is an important factor corporates look at while evaluating a startup on the portal
Financials
Stability and a clear path to profitability are essential for buyers. In the current environment, corporates are less keen to acquire startups with a high cash burn, at a time where their own investors are prioritising cash over growth. They assess the startup's financial health, including revenue, expenses, and projections. Buyers want to ensure that the acquisition will ultimately be financially viable and offer a return on investment.
Done Deal perspective : Even if you own a cash burning business, corporates are keen to explore if they have enough clarity on the unit economics
Strategic Fit
Buyers consider how the startup aligns with their existing business. Whether the acquisition enhances the buyer's product offering, expands their market reach, or complements their technology, it should align with their long-term goals. Buyer’s have traditionally looked at M&A as a “good to have” vs a “must have”, slowly but surely, most corporates are now looking at inorganic opportunities as a must to drive scale and for legacy businesses as the only way to stay relevant in a rapidly evolving market
Done Deal perspective : Understand the buyer’s growth journey, their own acquisition history, segments they are currently in and try to showcase the potential 1+1 = 3 benefits of partnering together
Cultural Compatibility
Buyers want to ensure that the startup's culture and values are in sync with their own. A mismatch in culture can lead to post-acquisition integration challenges.
Done Deal perspective : The first vibe check call is usually what it takes to get both parties comfortable with each other to dive deeper into a potential transaction