Technology Banking Professional Paul Inouye Discusses How to Prepare Your Software Business for an Upcoming Sale
Paul Inouye says that hiring a Veteran Advisor, Being Proactively Involved In the Process, Having Key ShareHolder Alignment, and Demonstrating Strong Business Fundamentals are all Essential.
With over three decades of experience in the tech banking industry, businessman Paul Inouye offers insight on how to best prepare for a successful m&a transaction. His recent conversation provided insights into what processes software and SAAS businesses adhere to in order to best ensure a smooth and successful m&a sale.
“SaaS companies and software businesses have increasingly become targets for both strategic and financial buyers who are paying a premium for high growth businesses.” Paul Inouye says, “For software startup owners, this is an exciting and stressful process. Preparing for a merger helps the process be a smooth success. In many cases, it is important to have a mentality of slowing down to hurry up.”
Paul Inouye says there are several things to consider as a SaaS or software business preparing for a sale or merger.
Hire an Experienced Advisor: It is critical to work with an advisor who has domain knowledge of the tech software industry. That advisor will be involved in the thousand decisions that happen between kickoff and close and needs to be a trusted and experienced veteran. He will also need insight into the strategic and financial buyers that will assist in knowing how best to position your business to them.
Get Your Things in Order: A merger is already complex but can be messier if you aren’t fully prepared. While it might go without saying, Paul Inouye says it’s essential to have clean well-documented financials, upcoming projected numbers well-vetted, and sales pipeline and visibility well organized. Customer contracts and legal proceedings must also be well in order.
Make Sure Your Key Constituents are Aligned: Paul Inouye explains that It is essential that key shareholders and board members are aligned as to the process, its goals, and its expectations. You also want to ensure that the appropriate senior executive team is informed and incentivized to assist in the transaction. Lastly, it is important that the key