Author: David Rowat

M&A BLOG

Strategic Exits is the leading M&A advisor for entrepreneurs in the tech industry.  We design and execute optimum business exit strategies, putting more money into the pockets of founders and their angel investors.  We only provide M&A advisory services on the sell side to technology companies. We focus on the tech industry because we were once founders and executives too.  We have experienced the successes and challenges of tech busines...

Exits Preparation

If you are a tech entrepreneur looking to sell your company, you want to see this video. It explains how to build a Financial Model that shortens the exhausting diligence process in two ways: first, it gathers all the historical, budget and future financial projections in one comprehensive Excel model, and second, it calculates the Normalized EBITDA used to value your company.Follow the process explained in the vi...

Valuation

Valuing technology companies by historical and projected financial performance requires different methods. Selecting the best method for your company depends on its stage of growth, profitability and many other factors. One size does not fit all. Further, there are many non-financial factors that can be used in very early tech company valuations. These factors can be used even before they generate revenue. Valuing pre-revenue tech companies is expl...

Uncategorized

M&A Fee Data Used to be Scarce: The size and terms of fees that M&A advisors charge for selling a company has been a hot topic in the tech industry for decades. Until the decade of 2010, data was scarce, and largely unpublished. M&A advisors would furtively gather in dark corners at finance conferences to discuss fees, but they were guarding information more than sharing it. The lack of transparency led to wide disparities in M&...

Valuation

Who Buys Technology Companies and When? Unless you plan to build a company over several decades, you should plan how your company will eventually exit. If you are not planning to take your company public, then you need to look for another company that will acquire you. There are many types of acquirers for technology companies: companies of all sizes (not just the big ones); private equity (PE) and similar funds; fa...

Valuation

When an exit is on the horizon, tech entrepreneurs need to come up with a way to value their company. Software as a Service (SaaS) companies are almost always valued using a Revenue Multiple. This is described in the companion article: Methods for Valuing Technology Companies. SaaS company valuation starts with the current average multiple for SaaS public companies and then adjusts the multiple up or down depending upon a myriad of factors.  Howev...

Exits Preparation

Many entrepreneurs say this. It is a reality that when you sell your company it takes a lot of work. This can be exhausting and stress inducing. However, there are ways to minimize stress and maximize the sale price. Minimize Stress and Maximize the Sale Price by Starting Early To sell your tech company for the most money with a minimum of stress means starting early - months before you start the exit process. Most...

Exits Preparation

Ever heard this advice: “Just run the business well, and the exit will take care of itself”? Nothing could be further from the truth. Many businesses sold based on this type of foolish thinking probably caused their technology entrepreneurs to leave billions of dollars on the table. Many entrepreneurs had worked for years building their companies, not realizing that more value is created at the exit than at any other time. To maximize the se...

Fully-Remote Companies

Fully-Remote Companies Means More than Working From Home  During the pandemic, we heard plenty of discussion about remote work, why employees love it, why companies are fighting it, and why we should expect to see hybrid in-office/at-home work styles. It may take some time to work out the bugs, but it is clear that remote work in some form will become a part of the work plan. There was occasional mention of how businesses ...

Fully-Remote Companies

July 11, 2020 Virtual Companies Sell for More Money (and the Founders Keep More of It)  Online presentation to the Keiretsu Forum Northwest Chapter June 16, 2020. Virtual companies (where there is no physical head office and everyone works online) are worth more money when ...