When your technology startup is ready to grow, merging with the right partner firm can dramatically expand your available business opportunities, resources and access to capital. Unfortunately, combining your company with the wrong partner can lead to stagnancy, lost profit and even legal trouble.
Keep these strategies for success in mind when considering a merger for your tech startup.
Find the right partner
Ideally, your small business should merge with a firm that complements rather than duplicates your strengths and weaknesses. For example, if you own a software development company but specialize in code, merge with an agency known for its incredible user experience acumen.
Run the numbers
If your firm plans to purchase another business, have it professionally valued and make sure you have the capital to come out on top in the acquisition. This includes any investment your company must make to ready the other firm’s offerings for your discerning clients.
If you have employees, you already know that rumors spread quickly among team members. Talk to your staff openly about the impending merger or acquisition and make sure they know whether and how their roles, workspace and other aspects of the business will change.
Assemble the right team
If you have been bootstrapping your business and working on a lean startup model, a merger or acquisition is the perfect time to fill out your C-suite. Make sure you have trustworthy executives in place to direct the merger in three key areas: sales and marketing, operations and finance. Once you have hired the right people, ensure they are able to work well together toward your stated objectives before moving forward with the merger.
Messaging and marketing, both internal and external, can make or break a seemingly promising merger. Think carefully about whether the name of the company will change and how you will introduce branding for the new firm to clients and other stakeholders.
Solid legal advice is a critical part of a successful merger or acquisition for your tech firm. Expect the process of buying another business to take up to a year.