Building Value: Preparing for M&A Transition

Building Value: Preparing for M&A Transition


Growing a middle market technology business is a challenging endeavor. Day-to-day choices affect immediate operations and the bottom line, as well as the longer-term value of the company. With hectic schedules and immediate pressures like customer needs, growth and profitability, business executives sometimes lose sight of the key factors which drive the long-term value of their business.

Most leaders focus on developing products and services to sell to customers. Typically, a great product + great service + great sales = success.  However, when it’s time to sell your business, the customers are different.  The game changes from selling your products to selling your company.

Whether you plan to sell tomorrow or at some undefined time in the future, it is never too early to consider the value you are building – and the value to those interested in buying a technology business.

Key Elements of Value

  • Products/Services
    • Should we be a product business, a service business, or both?
  • Intellectual Property
    • What’s our ‘secret sauce’?
  • Management/Employees
    • Why would an acquirer pay more for the team than the products?
  • Customer Base
    • Can we own our customers?
  • Market Position
    • Big fish/small pond or big pond/small fish?
  • Sales and Distribution Channels
    • We outsource sales and distribution. That’s a good thing, right?
  • Top Line Revenue
    • A good year makes up for erratic past sales, doesn’t it?
  • Bottom Line Financial Performance
    • We’ll be profitable by the time we are ready to sell. We promise.


In this series of articles, the Austin Dale Group will distill some of the lessons learned from our many years as M&A and Strategic Growth Advisors to emerging and mid-market technology companies.  We will review what acquirers want and how these key factors can have a dramatic impact on the value of a company to shareholders and acquirers.