The Founder's Guide to M&A: Nine Essential Considerations When Selling Your Company

In today's tech environment, with IPO windows narrowing and funding rounds becoming more challenging, understanding the M&A landscape is more crucial than ever for founders. M&A remains a viable exit path for many startups. Having been on many sides of acquisitions as a founder (exceed.ai), Employee (WebEx), Investor (Comeet.co) an acquirer (Cisco) and investment banker (Atlas Technology Group), I want to share practical insights on navigating this complex process.

The Reality of Selling Your Company

First, a hard truth: selling is emotionally complicated. Many founders (myself included) have looked back at companies they sold only to watch them grow substantially under new ownership. That's the power of recurring revenue—what starts as a modest SaaS business can multiply many times over, even when neglected.

However, the IPO bar today is significantly higher than in previous years. If you're aiming for a public offering, you generally need to show 50% growth at $500M in revenue. If you can't see that path clearly or don't have the burning desire to reach it, M&A might be your best option, especially in an age where AI is accelerating competitive threats.

1. Understand Buyer Motivations

What are they really buying? Often, it's not what you think.

Pay attention to who they bring to early meetings. If they drag in technical leaders, they're interested in your technology. If they bring a GM, they care about your revenue. Listen carefully and tailor your pitch to what they truly value.

Amazon's acquisition of PillPack is an excellent example. While the packaging and delivery mechanism seemed innovative, what Amazon really wanted was the software system that coordinated between providers, insurers, and pharmacy benefit managers. That software is now the foundation of Amazon Pharmacy.

2. Fully Commit to the Process

Selling is highly distractive—don't proceed unless you're all in.

M&A processes are time-consuming and demanding. If you're still in the founder-led sales phase without a built-out executive team, the distraction cost can be enormous. An M&A process can easily take a full year.

You've invested years building your company—don't half-commit to selling it. Your top executives and board need to be aligned and ready to dedicate significant time to the process.

3. Understand Corporate Priorities Change

What's hot today may be forgotten tomorrow.

Even at the C-suite level, priorities shift regularly. Deals fall apart not just for regulatory reasons but because executives get fired, leadership changes, or quarterly goals shift. I've seen numerous acquisitions derailed because the executive champion left the company.

These factors are entirely outside your control but can completely upend a deal that seemed certain.

4. Manage Team Expectations

The default outcome is that you still have your company.

Don't let your team start planning their dream vacation home purchases. The odds of any particular M&A discussion resulting in a completed deal are relatively low. Be 90% honest with your team, but help them understand this is primarily a learning opportunity.

Once you've hired a banker, however, the messaging becomes more challenging. The process has momentum, and backing out becomes more difficult.

5. Hire a Banker

They always pay for themselves.

For deals approaching above $50M or more, professional representation is crucial. Even if bankers don't secure another offer or negotiate better terms than you could, they provide essential separation between you and the acquirer. They become the "bad guy" in negotiations, which preserves your relationship with the buyer.

The only exception might be when two CEOs who deeply trust each other work out a deal directly. In those rare cases, introducing a banker can sometimes break that trust and derail the process.

6. Secure Multiple Bidders

Competition drives better terms.

Many M&A processes start with six potential buyers, then narrow to three, and eventually just one. That's a critical decision point—proceeding with only one buyer significantly reduces your leverage.

If you have a growing, profitable company, don't be afraid to walk away when competition evaporates. The acquirer's team is incentivized to chip away at the price once they know they're the only suitor.

7. Position Yourself as the Solution

You're being bought to solve a problem.

The fundamental advantage of M&A from the buyer perspective is that it provides a quick fix to a problem. Whether it's a feature gap, competitive threat, or a looming missed quarter, acquisitions let executives solve in weeks what might otherwise take years.

Listen carefully to understand what problem the acquirer is trying to solve, then position your company as the perfect solution. When you hear phrases like "build, buy, or partner," recognize that they're seriously considering acquisition.

8. Know Your Value Proposition

Understand what makes your company uniquely valuable.

Is it your team, technology, market position, or customer base? Different acquirers may value different aspects of your business. Some may view you primarily as an acquihire, while others might want your product or market share.

Tailor your messaging accordingly and be honest about whether you're being valued for growth, profit, or talent.

9. Prepare for Diligence

It will be more exhaustive than you expect.

Acquirers will scrutinize every aspect of your business—code, contracts, financials, and team. Prepare meticulously and address potential issues before they arise. Problems discovered during diligence can significantly impact valuation or kill deals entirely.

Final Thoughts

M&A is a complex journey with many potential pitfalls. By understanding buyer motivations, securing professional representation, creating competition, and honestly assessing your company's position, you can navigate the process more effectively.

Remember that the alternative to selling—continuing to grow your business—is often the best option if you have the team, resources, and market opportunity to succeed. Whatever path you choose, approach it with full commitment and clear eyes.