VentureBeat: An alternative to VC: “Selling In”
Ron Lissak
· 3 years ago
While electronic business brokers are not new, VentureBoard sounds like an enhancement over prior models. A word to the wise from a professional software M&A practitioner: good exits require careful planning. Most entrepreneurs would benefit from the relationships and expertise of a professional advisor who knows your industry (e.g. we know software), and many new boutiques have sprung up who will work with smaller companies to maximize the value of the business, and take a proactive approach to marketing. --Ron Lissak Catapult Advisors LLC
Michael Faught
· 3 years ago
Brian,
Very interesting perspectives and somewhat related to an approach I espouse and have executed successfully in the past. I'll cut and past the body of an email I just sent Gerald Hwasta (Shah Capital Partners) in response to a posting of his on "Technology Buyouts Come of Age." I'd be very curious to hear your thoughts on this strategy and it relates, or represents an alternative to what you're describing. Best, Michael ************************************************** Gerald, you're certainly correct about PE firms and their growing focus on technology buyouts. In my opinion however there is another, at least as big, opportunity in the space between venture capital and technology buyouts....technology-driven growth acquisitions. This is a buyout, not venture model, focusing on acquiring cashflowing but mundane "me too" operating companies (at commodity multiples) and utilizing (pre-sourced and "turnkey") technological innovation to immediately decommoditize the target acquisition's product or service. In turn, this enables the capture of market share (driving up revenue) and premium pricing (driving up margins) which, obviously, drives cashflow improvement, profitable exits (at premium multiples) and outsized returns to investors. By virtue of the fact that we focus on acquiring these boring “going nowhere†commodity companies, we avoid auctions and buy right….ultimately, this is all about legitimately proprietary dealflow. Gerald, if you (or any other VentureBeat readers) are at all interested in this strategy, I'd love to discuss this with you in more detail. Feel free to contact me at MFFaught@aol.com. I'm in Los Angeles. ***************************************** What do you think Brian? care to discuss? Michael
All Comments
--Ron Lissak
Catapult Advisors LLC
Very interesting perspectives and somewhat related to an approach I espouse and have executed successfully in the past. I'll cut and past the body of an email I just sent Gerald Hwasta (Shah Capital Partners) in response to a posting of his on "Technology Buyouts Come of Age." I'd be very curious to hear your thoughts on this strategy and it relates, or represents an alternative to what you're describing. Best, Michael
**************************************************
Gerald, you're certainly correct about PE firms and their growing focus on technology buyouts. In my opinion however there is another, at least as big, opportunity in the space between venture capital and technology buyouts....technology-driven growth acquisitions. This is a buyout, not venture model, focusing on acquiring cashflowing but mundane "me too" operating companies (at commodity multiples) and utilizing (pre-sourced and "turnkey") technological innovation to immediately decommoditize the target acquisition's product or service. In turn, this enables the capture of market share (driving up revenue) and premium pricing (driving up margins) which, obviously, drives cashflow improvement, profitable exits (at premium multiples) and outsized returns to investors. By virtue of the fact that we focus on acquiring these boring “going nowhere†commodity companies, we avoid auctions and buy right….ultimately, this is all about legitimately proprietary dealflow. Gerald, if you (or any other VentureBeat readers) are at all interested in this strategy, I'd love to discuss this with you in more detail. Feel free to contact me at MFFaught@aol.com. I'm in Los Angeles.
*****************************************
What do you think Brian? care to discuss? Michael