July 15, 2013

Why the U.K. needs a better acquisition culture

Asking for help should not be seen as a sign of weakness, especially in the business world. When it comes to M&A activity in particular, seeking assistance from advisors or investment banking firms will only be beneficial to company leaders. It can help them create a spark for a merger or acquisition that they might not otherwise be aware of. 

Peter Nixey, former CEO of Clickpass and a serial entrepreneur, wrote a contribution piece for TechCrunch. In the article, Nixey explained that the United Kingdom's technology startup scene has blossomed over the last several years. However, these companies are having difficulty moving forward because technology acquisitions are trickier to formulate.

According to Nixey, exit strategies are essential for startups, but the U.K. government has even stepped in to try and ease the process. He explained that the country has created the £440M-funded Technology Strategy Board and The Tech City Initiative, both designed to assist entrepreneurs in finding the right opportunities for their business.

"The first step of an acquisition is to build a relationship with the acquirer and to find out what they even want," he wrote. "In San Francisco you might meet the M&A guys from Google or Facebook at parties or conferences. That's not true in London though."

Nixey added that even just matching founders with people who would buy their firm would be a huge leap forward for the U.K.

In conclusion, the entrepreneur explained that creating an exit strategy is often more complex and important than people think. Great companies come from great acquisitions, he said. But success cannot be found until two organizations can meet and determine whether they are complementary businesses or not. After that first step, technology mergers and acquisitions can begin.