Startups aiming for rapid growth often have some important goals and tools along the way to reach them. One of them is the gain in market share and the increase in the speed of product offering. One of the ways to achieve them is through M&As, that is, the acquisitions of companies
For an M&A to be successful, it is essential to start by answering some key questions. Why carry out a merger and acquisition? How this meets the company's goals and strategies? This is the right time to take that step? I can guarantee that 'my house is in order' to go through this expansion renovation? What will I need to do to ensure a good integration of systems and teams? All of this requires a lot of homework.
The external pressure on the company also plays an important role. Investors often have high expectations and demand quick results, what can add an additional level of complexity to M&As.
According to a survey by ACE Ventures, who interviewed more than 200 startup entrepreneurs, 57% of respondents plan to sell or merge with other companies in the next five years, showing how this strategy is still a priority in the market. Anyway, the moment is still one of betting on operational efficiency, resource economy and relentless pursuit of solutions and technologies, with artificial intelligence being the most sought after. Here the question also arises: should I follow this market trend or does my business have other urgencies and opportunities? Could it be that, before bringing AI to the business,we have more basic things to solve
Once the business priorities and company strategies are defined, it is time to assess the current moment. To begin, it is worth remembering that one of the worst times to carry out an M&A is when the company is doing poorly, and mergers and acquisitions are seen as a lifeline. It's like having a household economy in crisis and bringing another family to share the house. The acquisition of a new company brings new employees, culture, products and various factors that need to be balanced for a situation that was already complicated.
A good scenario for conducting an M&A is just before the moment when there is "extra money". The company is in a relatively stable financial position, but sees the opportunity to further improve your situation before reaching a financial peak. This allows the company to make the most of the acquisition, investing strategically to grow and expand its operations
Besides the economic aspect, the decision must align the Go to Market (GTM), that is, what will be the company's strategy to integrate the new products, services or markets of the acquired company in its business model. For being a bold move, may require a significant investment. But, when done correctly, she positions the company ahead of the competitors, enabling accelerated growth and new market opportunities
In some situations, waiting for the risks to dissipate before making a decision can result in the loss of a valuable opportunity. In the context of M&As, a company sometimes hesitates to close a deal due to uncertainties or perceived risks, but this hesitation can create space for competitors to seize the opportunity first
Before making a decision, do not underestimate the importance of thorough and comprehensive due diligence. This process is the backbone of any successful merger or acquisition transaction. All the time invested to thoroughly assess the financial aspects, legal, operational and cultural aspects of the target company are well spent. A rigorous due diligence not only protects the investment, it also provides the necessary clarity to make well-founded strategic decisions, significantly increase the chances of a harmonious integration and boost sustainable long-term growth
Regarding the merger phase, in English, recognized as a great reality shock and the biggest challenge of M&As, the advice is to make a good plan, delegating clear tasks to the C-Levels, without ever forgetting to prioritize and retain talent. Buying companies and technologies is just the beginning. Prioritizing the integration of people and leadership is the key here, because they are the ones who make innovation happen. In the end, the game requires a bit of risk, a lot of preparation, tidy house, dialogue with stakeholders and the understanding of how to blend and strengthen corporate cultures and diverse talents.
