Sold my company to Zapier 12 months ago today! 12 thoughts on getting acquired

Zapier acquired Makerpad 12 months ago today.

12 thoughts on selling a company:

1. The Outcome

It's impossible to not think about it. So just get it out of the way. Make a shortlist of your big wants (just don't keep staring at it!)

Mine were:

• dream car
• wedding abroad w/ friends & family
• buy a house together
• full-body health assessment

2. THE number.

Don’t say your number first.

Plot out some scenarios and valuations - ask advisors if you can.

Be prepared that their offer may be anywhere in or out of your range.

Practice not visibly reacting when a number is said to you and what your response should be.

3. Significance

This is likely the most important thing to happen in your working life.

It’s not the same level for the acquiring company.

Just know that and set your expectations accordingly.

4. Time.

You’re in a rush. We always are.

The acquiring company aren’t in the same rush as you.

It’s good if there are external factors that give a deadline.

For me, the potential UK Capital Gains Increase on 3rd March 2021 gave us a deadline.

5. Valuation ranges wildly. A few easy frameworks to use:

• 3-5x your revenue for a SaaS co
• existing + new customers worth to the acquiring company
• see what public tech valuations are for similar companies
• look at funding announcements for similar companies

6. Types of acquisition:

Team + tech = Acquihire. Valuations are lower.

Team + tech + traction = Sweet spot. Higher valuations.

7. My deal is different.

No. It. Isn’t.

I researched other acquisitions and naively thought ours would be much simpler.

Most deals have the same experiences. Be prepared.

8. Emotions.

It will be stressful. I don’t deal with stress very well.

I have an assistant (training to be a therapist). I wish I had her through the deal process.

Get the bad stuff out with someone independent, away from your personal life.

9. Don’t stop working.

Acquisitions are all-consuming. It takes up every moment in your brain.

Let work distract you. You need to keep the business growing.

You don’t want a revised offer or the deal to fall through last minute while you’ve been planning your dream vacation.

10. Get a good lawyer.

They are expensive but worth it.

You won’t be able to even think of all the things they’ll have to deal with.

My dad is a lawyer too so I ran lots of things by him.

11. Curveballs happen.

Deals fall through and an offer can change. Remember why you're doing this. And if the number changes, does it still meet the goals you had before you started the process?

Try to prepare for some curveball scenarios and write them down.

12. Your company is your baby.

But this is a business deal. Yes, make sure your baby is happy but leave your ego out of it.

I’m lucky, I hired my best friend who advises companies through acquisitions & he explained everything like I was 5 years old. He mediated the whole deal.

(if you want to read about the deal it was covered here)

🙏 Cheers for reading.