Recently, I was reading a blog post from the founder of a startup called Smart Bear where he (Jason Cohen) was spilling his guts about the emotion he had felt during the process of selling his company. But more interesting to me were some of the operational philosophies on how he thought about his company and that from the beginning the company was built to sell:
“Profit was the rule behind every choice we made. Although the end goal was always acquisition, my attitude was (and still is) that the best way to get yourself acquired is to be profitable. Profits prove the business is operating well. Profits validate the market. Profits make minimum valuation easy. Profits mean the buyer converts balance-sheet money into bottom-line profit-and-loss money — a trade every large company wants to make.
Most of all, profits mean you don’t need to sell, which gives you the ability to walk away from a deal. You have little negotiating power in any deal unless you can happily walk away.”
Jason Cohen- from asmartbear.com
For those of you building or starting a business the nugget in Jason’s advice is to make sure you are as efficient and profitable as you can be to attract the best terms if an acquisition offer is presented to you.
