Doing the Deal

Originally Published MX March/April 2004

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Start-up companies whose intended exit strategy is acquisition can adopt strategies to maximize investor return, but caution is still essential, say the experts.

"It's a good idea to listen to the market, but companies shouldn't be caught chasing it," says Brewster. "Companies shouldn't 'buy' revenue just because they imagine that their eventual acquisition deal is going to be done at a multiple of revenue. Companies should remain focused on their own mission, their own technology; they shouldn't go after a niche just because it appears the market favors it."

"Companies need to focus on fundamentals," says Cohen. "They need to balance long-term and short-term interests. Executing strategies that make a company attractive for sale in the short run could distract needed focus from the central business.