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Think Tank M&A

Trade Sale, Open Innovation, Corporate Venturing

Auteur

Yves Zieba

I currently bootstrap @Hackyourstyle, @Syntezia and @Agilenetup. I also help @panglosslabs1 and @yoursoftweb. My passion is to help my clients stay creative, innovative and up to date with open business models. I specialise in rapid prototyping, competitive intelligence, open innovation and strategic agility. We follow the latest developments in social media, cloud computing, in 3D (printing, scan, manufacturing) in mobile apps and games, as well as in big data. semantics, text analytics and HR analytics technologies. We have developed a special interest the Open Education trends and what happens with the MOOCs. As a Corporate Responsability Ambassador, I regurlarly talk about ethics as a conference speaker, or as a moderator, and I have recently been awarded as "Equal Salary Ambassador". I am active on Twitter, Facebook, Github, Google+, Pinterest, Quora, Instagram, Persiscope and LinkedIN, you can find all the links in the Contact section. Very keen to interact with you.

9 incredible tips to sell your startup early

You have enjoyed the ride, maybe you have had enough or maybe you feel it is the right moment to exit at the highest possible price point.

So now is the time for you to sell your startup and move on.

What do you need to know before getting started ?

Here are some hands-on tips and tricks to prepare and execute the sale of your startup and start a new one, an even cooler startup !

Tip #1: Why making an investment in a Startup is only the beginning of the journey ?

  • What types of investments, exits and returns have you made so far ?
  • How to decorelate between exit of the investors, exit of your startups and the priorities of the different entrepreneurs ?

Tip #2: What is the right exit path for my startup ?

  • How to review and chose the various types of exit paths ?
  • What are the triggers, prerequisites and timings for each exit path ?

path

Tip #3: Why, how and when should you exit ? What might happen when you choose to exit ?

  • What difference does it make whether I exit to an Angel Investor, a Venture Capitalist, to a Private Equity or on a Secondary Market ? Why should I care ?
  • IPO, is it possible for your startup ? Is it really a jackpot for you ?
  • Share repurchase by entrepreneurs, is it really a win-win alternative everyone is talking about
  • 9 distinct areas in a Due Diligence process. Sellers do their Due Diligence. Buyers also do Due Diligence! Then we talk ! It is important to understand this process and its consequences.
  • What are the risks in these transactions ?
  • What are the personal liabilities for investors & entrepreneurs ? How to limit them ?

Tip# 4 – What are the most successful exit path in Switzerland ? Why is the Trade Sale so popular ?

Is it the right deal type for you ?

  • Buy-Sell Agreement
  • Share Purchase Agreement, what is its timing, intention and what are main clauses

Fiscal optimisation for all parties involved: this plays a key role in many transactions.

Tip #5 – Would hiring a professional negotiator make a big difference ?

There are many advanced negotiations tactics, to chose from, which ones have you used ? which ones have worked ? Which ones have you seen being used ?

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Tip #6 – Who will be around the negotiating table ?

handcheck

Who will not be there but will be influential in other ways ? Always useful to keep in mind your list of stakeholders and to manage your counterparties proactively: shareholders, investment banker, lawyer office and buyer. They are usually somehow in the game.

Tip #7 – Valuation of your startup – No one else knows your startup better than you. So roll your own and be well prepared.

rollyourownHave your own way to do the startup valuation. Get some advise of course.

bridesWe all know that all brides look sexy. The seller is always looking good. We will find it difficult to know all the hidden problems and to be 100% sure about the intention of buyers and sellers. It is part of the pocker game and the negotiation preparation.

  • I know how much money I can get but what will they gain?
  • How do you chose your lawyers ? They are probably your most expensive friends. What can you prepare without them ? Where can you save a couple of hours of their time ? Where do they truly add value ?
  • Does the company need a CFO, a CEO, or some kind of CxO ad interim for managing the transition and the acquisition integration ?

Getting paid in cash vs shares. What can you exercise?

 

Tip #8: Are you really really ready ?

  • How to know if I am ready to sell and exit?

Here is a Free Exit readiness assessment tool.

Tip #9 : Secret booster

  • How to accelerate if you have to ? The buyer is ready and wants to move fast. You are half ready to sell but unsure you are not missing a unique exit opportunity. How do you deal with that.

CONCLUSION

Better safe than sorry, it is super important to have the right team around you to manage your exit and to be well prepared before you reach the negotiation tables. Startups need to build a growth plan and exit path early in their life cycle to unlock the value created and to maximize the chances of their founders and investors making financial returns.

We would like to hear from you, how did it go for you ?

If any of this is useful, please comment, we would like to hear from you.

If you are asking yourself some of these questions, let us know.

 

L’innovation numérique en Afrique, telle qu’elle se vit au Ouagalab

A l’occasion du passage à Genève de Gildas Guiella, le fondateur de Ouagalab, nous avons pu échanger sur les perspectives de développement durable et d’innovation en Afrique, notamment en Afrique francophone, et prendre date pour les prochaines grandes dates pendant lesquelles il sera possible d’aller à la rencontre des ces acteurs de l’innovation qui bouillonnent d’idées.

Pour retrouver notre interview, en collaboration avec Dukascopy TV, veuillez cliquer ici.

Opportunités d’investissement dans le gaming

Nous aidons deux jeunes startups de gaming à développer leur prochain jeu. Les sommes levées permettront de recruter un 3D modeller, pour compléter l’équipe, et de réaliser et de lancer le jeu sur Steam Green Light. Pour toute information, merci de nous contacter.

 

Will Paypal share price explode ?

Following persistent rumours about Paypal Holdings Inc, being a potential acquisition target, its share price is expected to jump from 37,07 $ to 50 $ in the next 30-60 days.

Paypal has split from eBay and can now be acquired.

MasterCard could make a move in the coming weeks and is said to be in advanced negotiation stage to offer 50 dollars per share. (Paypal valuation would therefore be 61 billion $). With 1.3 billion cards in circulation, MasterCard remains confronted with very strong competitor (VISA), who have made lots of strong investment recently.

Apple-payment-square

Such an acquisition would enable MasterCard to make a big jump in the payment services, e-commerce services (Alibaba, Amazon and the likes) and to operate some of the largest sharing economy unicorns (AirBnB, Uber…). Merchant services, one of Paypal’s strenghts, would also be a way for MasterCard to acquire a dominant position in a strategic market, where Paypal dominates the world. As this is probably the quickest and easiest way for MasterCard to enter in this highly lucrative market, MasterCard is prepared to pay a substantial premium.

Investment opportunities in education (open source robotics)

We are looking for investors to support an open source educational robot.

Communicate well, communicate early, communicate a lot !

Why is good communication essential to successful acquisitions integrations ?

The communication role needs to begin during the preliminary stages to set the scene. Too often the communication doesn’t start until too late. Mergers and acquisitions go through three broad phases. « Which phase bears the greatest risk of failure? »:

  1. Strategy development, target shortlisting, due diligence – 30%

  2. Negotiation and closing the deal – 17%

  3. Post-merger integration – 53%

This response shows that the most important time for a merger or takeover is when the deal has been formalized and the more difficult stage of ‘bedding down’ the process has started, requiring intensive communication. However, there is a case that communication should start early to pave the way for internal acceptance and post-merger integration.

Overwhelming experience indicates directly or indirectly that people issues are the main reason for takeover failures. And communication is central to the people issues.

Management of the human side of the merger is the real key to maximizing the value of the deal.

Cultural incompatibility is consistently the biggest barrier to integration.

Out of three key merger factors – people, processes and systems – only people issues made a difference to the success of mergers.

Effective employee communication is the first or second most important issue emerging in all studies of mergers. Internal communication and culture changes are identified as the hardest to achieve, but the most important in merger success.

They are generally under-resourced in post-merger integration, and are often absent before the deal and the due diligence phases. Interestingly, customer issues are also extremely poorly resourced.

How could management do this? And how could highly paid management consultants let this happen? The two most important constituencies to look after – customers and employees – have largely been ignored. It defies logic!

Most of the merger communication budgets around the world have been spent on external communication rather than employee communication!

Regardless of the brilliance of the vision and the fit in a merger, the subsequent success of the deal depends mostly on the employees. They are the ones whose day-to-day actions can make a merger work or can sink it after the deal is done.

A sufficient investment in internal communication is the link in keeping the employee attitudes positive towards the changes brought about by the merger. Gamifying the employee experience, specifically at this moment is key to success.

Communicate early

Even before a formal merger or acquisition is underway, employees often become aware from indirect information or by chance that something is in the air. It is human nature to want to know what is happening. If they feel management is keeping information from them, quite understandably they start to feel anxious.

When people are uncertain, they start to speculate about the clues in front of them. Invariably this interpretation of clues becomes paranoia as they chat to workmates and quickly develop a view that a management conspiring the worst. The grapevine goes overtime with rumors. Productivity starts to drop as staff waste time in discussing rumors and losing some of their motivation. With well-developed rumors, some staff actually start to leave the company before, as they believe, the bad news hits.

When a merger is announced, staff in the acquiring company may not feel concerned initially. They belong to the new parent and don’t anticipate much change. This sense of security is not always justified because the process of establishing the new joint organization can reveal areas of the acquiring company that could be improved.

If two roughly equal parties merge, change will hit both sides. Employees will become anxious about their jobs. They will suddenly have to confront:

  • loss of status and influence;
  • uncertainty about the employer’s plans;
  • a fight for individual survival as fear of job cuts takes hold;
  • increased workloads because some people leave voluntarily or involuntarily;
  • a spillover effect into individuals’ lives.

Effective strategic communication plays a key role in addressing these issues, but is difficult and complex:

  • Effective communication demands intensive time from senior management at a time when they may be totally devoted to the technical and financial aspects of the deal, and may not have sufficiently considered the impact on others.
  • Effective communication requires training because many managers have never received guidance on good interpersonal communication practices.
  • Communication doesn’t come easily to many managers who throughout most their careers have dealt almost entirely with hard facts and figures, not the ‘soft’ people issues – these managers may not be good enough as leaders.
  • Many managers are uncomfortable about giving tough messages to their staff, and being honest with them about bad news of job cuts or site closures.
  • Mergers involve many technical and complex issues required by law, the stock exchange, and regulatory bodies. Communication is not legally required and so it is an easy area to drop down the priority list.
  • Communication is not easily quantified and measured, which makes it difficult to grapple with when merger budgets are being considered.
  • The communication function isn’t always represented at a sufficiently high level within the organization, and even then the head of the function may not be strategically minded.

Investment opportunity for private investor

We have a direct investment opportunity for an individual investor with significant experience in the ultra luxury watch industry.

The opportunity is to invest at the creation stage of an ultra high luxury Swiss watch company, based in Switzerland.

The watch design is uniquely inspired by Japan and is kept confidential.

Identified competitors include GREUBEL FORSEY, RICHARD MILLE, RUDIS SYLVA, URWERK, DE BETHUNE, MB&F, VOUTILAINEN, VIANNEY HALTER, ROMAIN GAUTHIER, LOUIS MOINET, ROMAIN JEROME, FRÉDÉRIC JOUVENOT, HYT, MCT.

It is a rare opportunity to invest in seed money and work directly with the founder (who is looking to raise between 2 to 6 millions CHF) at the very early stage. For more information (full business plan…), please contact yveszieba@gmail.com, Skype: yveszieba, 0041795611054.

Comment intervenons-nous ?

Nous soutenons les entrepreneurs et les investisseurs sur des cessions d’entreprises, des levées de fonds, des opérations de croissance externe et des tradesales.

Contact: Yves ZIEBA (0795611054 / yveszieba@gmail.com)

Parmi nos types d’interventions:

  • Identification des cibles
  • Conseil acquéreur stratégique
  • Conseil investisseur spécialisé sur des opportunités d’investissement.
  • Conseil cédant
  • Levée de fonds
  • Due diligence business
  • Négociation
  • Préparation des documents, pitchs et présentations
  • Media training avant les pitchs
  • Préparation des campagnes de crowdfunding

Our references

Date Role $ Deal Structure Industry Company Name Target
2013 – 2016 Scouting, Due Diligence, Fund Raising, Negotiation 1-5 Mio Acquisition / JV IOT, Golf, Biotech, Skincare, renewable energy Under NDA Under NDA
Aug 2011 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition US Crop forecaster Thomson Reuters

(70000 employees)

Lanworth (22 employees)
Aug 2011 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition Metals analytics Thomson Reuters

(70000 employees)

GFMS (Gold Fields Mineral Services)
Oct 2010 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition Direct Market Access Trading (DMA), buy-side quants and hedge funds doing algo trading. Thomson Reuters

(70000 employees)

Aegisoft
May 2010 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition Essential trading analytics, news and content for the energy and environmental markets. Thomson Reuters

(70000 employees)

Point Carbon
Nov 2009 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition Swiss environmental, social responsibility and governance (ESG) data provider Thomson Reuters

(70000 employees)

Asset4
Sep 2009 Acquisition Integration for Sales and Customer Service 42 Millions Euros Acquisition News release Thomson Reuters

(70000 employees)

Hugin Group
Aug 2009 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Acquisition Enterprise tick data solutions, velocity analytics Thomson Reuters

(70000 employees)

Vhayu (founded by Intel)
Jul 2009 Acquisition Integration for Sales and Customer Service The terms of the deal of privately held Streamlogics remain undisclosed. Acquisition Results-driven webcasting solutions Thomson Reuters

(70000 employees)

Streamlogics
2008 – 2010 Acquisition Integration for Sales and Customer Service The terms of the agreement were not disclosed. Partnership / JV / Acquisition Order routing FX derivatives Thomson Reuters

(70000 employees)

Autex (Tradeweb)
May 2007 – March 2012 New Operating Model Implementation 17.2 bil Acquisition Information, news, data, graphics, hardware, software. Thomson

(35000 employees)

Reuters (35000 employees)
1995-1997 Post Acquisition Rebranding The terms of the agreement were not disclosed. Acquisition Oil distribution, service stations network Elf Minol
1993-1995 Post Acquisition Strategic Planning The terms of the agreement were not disclosed. Acquisition Biometrics authentication and identification systems (AFIS) Sagem Morpho Systems

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