B2B SaaS veteran and startup advisor Josh Scherman will unpack business development-led M&A and explain why it may be your best path to a successful strategic exit.

Key Takeaways

• In the aggregate, marriages tend to be more successful if the couple had dated prior to getting hitched… maybe an obvious statement.
• The same is true in M&A. Things like product synergies and cultural fit (the most underestimated factor) can be better understood through existing partnerships.
• The alternative is generally a process of trying to fill that same level of understanding in a rushed diligence process…. or it never even gets to that stage because synergies aren’t even discovered (ships passing in the night).
• This approach can also get to outcomes most desired by founders. Most founders want to sell to a strategic buyer, as opposed to financial acquisitions or other exits that tend to dismantle or divert the original mission. These acquisitions also tend to have better terms & valuations. BD-led acquisitions can boost the chances of that outcome.
• It’s also a much smoother M&A process because most of the vetting has already been done. That means time and money.
• Examples: Loom and Atlassian. GoDaddy and Over. Constant Contact and Single Platform. Vendasta and Matchcraft.
• The lesson for startups, hang around by the hoop. So when the timing is right for strategic acquisitions, you’re already there.
• Also build a pipeline and cast a wide net. Look at potential acquirers such as those with recent PE funding. Allocate 4-5 hours a month to nurture a pipeline.

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Is BD-Led M&A Your Path to Exit?