When an acquisition proposal isn’t quite right
While a company in the hunt for a merger or acquisition's goal is to close a deal, sometimes the object of your negotiation is to decline an offer. Here are some reasons why you may turn down an acquisition:
- The timing isn't quite right. Perhaps you've explored M&A to discover whether now is when your company could benefit from such a deal. Through the discovery and negotiation process, it may become evident to you that there's more growth your startup can achieve on its own. In this case, it might be better to refocus your attention on research, development and other improvements that could position your company for a better deal down the road.
- The price isn't quite right. If you have a negotiating partner with big ideas and serious interest in your company, you might arrive at a deal that falls short of your financial expectations. Whether you would move forward with less cash, equity or decision making power than you had hoped, committing to an unsatisfying acquisition can cause serious seller's remorse once the deal is closed. Keep your expectations realistic without settling for less than what you feel you deserve.
- The fit isn't quite right. If it's the perfect time to sell your company and an enthusiastic buyer will pay anything to satisfy your financial expectations, everything should be perfect, right? Not exactly. These conditions can be met by a buyer that's not what you had in mind. Whether your values don't line up or you'd rather leverage your creation to different ends, this can be an irreconcilable difference that causes you to decline the deal.
When you have an experienced M&A advisor on your side, you can know when the time, price and fit is right for your company to sell. Contact us today to learn more about how working with an advisor can help you navigate the process of selling your startup.