If you want to sell part of or your entire business, you can engage a range of advisors, brokers or investment bankers. Or you can try something different.
We help you get ready for that event by finding the essence (the crown jewels) in your business that is most valuable to the widest range of suitable bidders.
There is something magical about selling all/part of your SaaS Business for a large cheque (more likely a bank transfer). It is a by-product of an incredible amount of energy and smarts, but could preparing for Exit be even worth thinking about before you are ready to Exit?
We think about the Weekend Raids. Zuckerberg is famous for it. When he decides a business is critical to the future success of Facebook, he goes after it personally. He can work through a Founder’s concerns and needs and satisfy all of that in the space of a weekend. That’s a weekend raid. Come Monday morning, the announcement ripples out.
No-one else knows what’s going on while a Weekend Raid is happening.
Now when you think of these two companies: WhatsApp and Instagram, how could you value them against one another? Which one has more value today? They are both privately held by Zuckerberg (and it really is that closely held because of his majority of decision-making controlling stock means he calls the shots - and Priscilla of course).
Instagram was bought by Zucks (we’re at that level of familiarity now) for $1bn. WhatsApp was bought by Zucks for $19bn. Weekend spending sprees. We can just imagine Priscilla asking him if he’s doing any shopping this weekend and Zucks calls out “yeah honey. Um, I’m trying not to, but looks like I might have to go to $19bn to get this messaging app”.
But why was WhatsApp 19 x the price of Instagram?
We haven’t spoken to any of the Founders of Instagram and WhatsApp. Instagram was 2012. What’sApp was 2017. The other players in the market might have tabled offers already that the Founders of WhatsApp could use as leverage. But also maybe the WhatsApp guys were more prepared for Zuck’s weekend raid. Maybe they played the game a lot smarter. Maybe the way they engaged added a 1, 2, or 3 billion to the discussion. Once Zucks was over a $10bn offer/value did an extra 1, 2, or 3 billion really hurt him?
Zucks was committed at a certain point and had the ability to write a certain cheque size.
WhatsApp resisted advertising in its offering. Today, in November 2022 it still has no advertising. It still behaves independently of Facebook in many ways. We know someone who was one of the first employees to work across Facebook Instagram and WhatsApp. They told us that employees from each business are in separate buildings with separate swipe card access. There is no “lets muck in together” the way you imagine other global giants operating. Segregation for the benefit of each SaaS Business serving its customers and staying unique and relevant.
So we help you get ready for that out of the blue phone-call from a Global Giant that’s ready to buy your SaaS Business. You have probably spoken with a few already if you are reading this, you might be getting the glowing treatment of how great your SaaS Business is and how wonderful it might be to get a big fat cheque.
For those who haven’t come across this, people’s full time jobs in Global Giants (large Global Corporations) are “Mergers and Acquisitions”. Their mantra is this: “we will buy you or if you are too big to buy, we will merge with you.” Their job is to do deals. Buy companies all day long. Look for synergies.
So our job is to help you assess timing, value and process.
When is the right time to engage (if not now, what’s the best way to communicate with these people if they call); how do I calculate the value of my SaaS Business for a buyer (versus for an investor); and how do I run the process properly?
Every situation is different.
We are able to help you add significant value because we are seasoned business builders and capital advisors. Whether it is a weekend raid or a long-term strategy you want help with, get in touch.
We are very focussed on post-transaction success. That means you and the company you are acquired by are delighted with the outcome.
We believe one of the keys to that success is to embark on a strategy we call “Transplanting Innovation”. Our goal is to have your SaaS Business be transplanted into the Global Giant in much the same way as WhatsApp sits in the Facebook empire. What’sApp is a world of its own and is flourishing and expanding under Zuck’s ownership.
Some weekends are truly magical. $19bn magical.
About SaaS Elevator:
SaaS Elevator helps SaaS Founders reach $200m ARR through specialist training & events. Our training is focussed on Strategy, Capital & Revenue. Selected graduates have access to our network of venture builders (Moonshot Studio Ventures) and capital partners to help them on their journey.