John McCann sold The Bolt Supply House to Lawson Products (NASDAQ: LAWS) at the end of 2017. McCann’s strategy involved learning from the acquirers who knocked on his door. He invited would-be buyers into The Bolt Supply House and listened to what they had to say. He was not committed to selling, but instead wanted […]

A great business is bought, not sold, so, if you look too eager to sell your business, you’ll be negotiating on the back foot and look desperate—a recipe for a bad exit. But, what if you really want to sell? Maybe you’ve got a new idea for a business you want to start or your

Big public companies trade at a significant premium over small businesses in the same industry because investors perceive big, sophisticated companies as a safer bet than small, owner-dependent companies. Let’s take a look at the professional services industry.  Although most consultancies are a small collection of experts, there are also a handful of big publicly

Did Microsoft Overpay For LinkedIn? Microsoft’s recent $26.2 billion acquisition of LinkedIn provides an illustrative example of a strategic acquisition – the type of sale that usually garners the most gain for the acquired company’s shareholders. You may be wondering what a billion-dollar acquisition has to do with your business, but the very same reasons

Jay Steinfeld built Blinds.com into a $100 million e-tailer before selling out to Home Depot. Here are five things that made it a spectacular exit. Win The Make vs. Buy Battle Companies like Home Depot have a “make or buy” decision when they see a competitor winning market share. They can opt to buy the

When David Perry started his video game company, he filled a dartboard in his office with the names of companies he thought would want to buy his company, Gaikai, one day. Why would a startup business with no revenue or employees be thinking about potential acquirers so early? For Perry, it comes down to something

Most company founders are good at the first stages of entrepreneurship. But in the phases that follow, they may only be average. Just because you have a knack for starting companies, doesn’t necessarily mean that those skills translate well into growing one. There are celebrated cases of founders who have successfully started and grown a

If you’re wondering what your business might be worth to an acquirer, there is a simple calculation you can use. Let’s call it “The Build vs. Buy Equation”. At some point, every acquirer does the math and calculates how much it would cost to re-create what you’ve built. If an acquirer figures they could buy

If you decide to sell your business to an outside acquirer, you’re going to have to decide between a financial and a strategic buyer—understanding the different motivations of these two buyers can be the key to getting a good price for your business. A financial buyer is acquiring your future profit stream, so they will

Have you ever wondered why startup companies stop growing? Sometimes they run out of potential customers to sell to or their product starts losing market share to a competitor, but there is often a more fundamental reason: the founder(s) lose the stomach for it. When you start a business, the assets you have outside of