Angel investing · M&a

How to position a product for an acquisition to a specific company?

Mahmoud Elsaid Entrepreneur-LamasaTech MD for Signage,Touch Screen & Kiosk Solutions-Technology Innovation/Business Strategy Consultant

June 30th, 2015

So here is the drill. We have a software that we have developed that lets say works on a niche type of technology that require a specific platform. 

Now we have invested quite a good a mount of effort and funds into getting this product where it is and has grabbed the attention of multiple huge customers and been used by a few. 

, We developed it ontop of our own platform which is proving to be difficult to maintain. . and unfortunately since the niche technology that such product is attached to, its not our businesses bread and butter. I am reaching a stage where i can see a specific company operate in this specific niche and have a their own platform which is their main line of business and have the market reach for it but they don't have a fully polished product that could service the corporate sector which our product does. The thing is they are the type of company that don't resell others tech. they have their own platform and developed few applications for different sectors that they sell it. 

I want to approach the owner of the company to guage the concept and position the idea of perhaps acquiring the product as I know they can do much better with it than us... However I am not sure whats the right approach to do so. I have his contact details and have him on linked in and we met once before. So reaching him isn't the difficult part. But I dont know him quite well and feel that it may not be right to go to and just spark the idea of an acquisition in an email as it may devalue our proposition... Not sure. Maybe I am wrong and should be quite honest about it? 


Any advise will be very much appreciated on how to make this proposition or spark this proposition in good way. 

James Hogan Vice President of Worldwide Sales at ShareVault

June 30th, 2015

Why hestitate?

I've done many transactions in my career. All of them were based on relationships built on trust,  mutual respect and honesty. AKA "the Golden Rule."

You should pick up the telephone and ask them for a face-to-face meeting. That is the only way to establish the trust and respect necessary to get the deal done.

Who knows, you may learn something. ;-)

Abdo Magdy Entrepreneur, Storyteller, Group CEO at EGY Enterprises Ltd.

July 1st, 2015

To me, at this stage it depends more on "pick up" skills. As you are connected on LinkedIn, a message can be a good opening thread:

Hi first name,

Hope all is great, I was discussing with the team and we saw a potential win-win situation in integrating one of our products with your company. Please, let me know if you'd be available and interested anytime soon to discuss it further.

Thanks a lot

Best Regards,
Name

Mathieu Guerville Director of Strategy, M&A & Business Development

June 30th, 2015

Hi Mahmoud,

I am typically on the other end of these conversations (I'm the big company guy who buys the smaller companies), and there's no one-size fits all approach. The general advice is that it's easier than you'd think to get it done, but your ability to achieve the outcome you seek, and maximize the price depends on the company culture, the competitive landscape and a few other factors. Just doing it is easy, you literally just have to pick up the phone and tell them you're curious if they'd be interested. Doing it right, where you get a fair offer (purchase price, long term employment for you and staff, healthy diligence process, no poison pill, etc.) is the hard part

I'd be happy to help you if you'd like, PM me if needed

Bob Smith Consulting to Boards, CEO's and Key Management Teams, Strategic Investor and Fast Growth Companies

June 30th, 2015

I think that Mathieu Guerville makes the richest points and James Hogan provides the more direct focus.

The thing I would add to the mix is to have an understanding of specifically "how" the Buyer company would be better off in either Market Presence, growth in Market Share for new Customers and/or more Revenues because of your offering.

Make it about their needs and be clear about your own needs.  Understand the contribution you make with the product and focus on having them "get it".  Good luck.,

Derek White Founder at AutoSaver.com, Consultant for Hire, Creative Leader and Entrepreneur

July 1st, 2015

I concur with Abdelrahman... you need to initiate dialogue and plant the seed (so to speak).

Good luck!

Ming Tsui

July 1st, 2015

This reminds me of start up pitching to angels a nd venture firms about their start ups
to get funds from these people with money.

Looks like a hard road ahead of selling your final product to me. If you have great sales
skills, this should not be hard to do. Able to talk is very important. The ability to layout
the technical stuffs in simple human terms could help also.

You might map this out and how to pitch this to your potential customer or buyer with slides
and pr4sentations and then samples or the final product. Hope they already loved what you
have to offer. Good luck.

Mahmoud Elsaid Entrepreneur-LamasaTech MD for Signage,Touch Screen & Kiosk Solutions-Technology Innovation/Business Strategy Consultant

July 1st, 2015

Gents, 

Thank you so much for your insight and feedback. It is very useful to get a sanity check. I will open up communication. Once I spark the first contact and if I get a positive feedback, I will update you with progress. 
Mathieu, Thank you for your offer to help. Will do.