Smart Lemming Diary: Pitching Why a Potential Acquirer Should Invest in Our Startup
January 30, 2006
Finding Equity Investors or Getting Acquired
This morning our CEO has a meeting with our first channel partner at their request to discuss how our companies can be more aligned.
Our company has contributed to 60+ sales opportunities representing million of dollars in their sales pipeline. He’s pitching the advantages to an acquisition or equity by stating three things:
- The channel partner would have pricing and strategy flexibility since its key competitor is using a competing product as loss leader
- We have three channels in place for distribution of our products
- Leverage product platform by integrating into their existing solutions
Partner Relationship is a Success
My CEO’s also highlighting that we’ve been a demonstrated success. Our company is at the right size with a small, specialized sales team. The Development staff & processes are in place and scalable. We need to scale so we need additional funding.
Two Options
It appears that my CEO’s startup has potential two options for an exit strategy:
- Equity Investment: plan to close a funding round in Q4 with existing lead investor, business plan self funding, and equity investment by partner would provide greater flexibility in use and deployment of current and future products.
- Acquisition: our most likely exit strategy is being acquired by a large company that controls other assets in continuum, roll-up to create continuum company, valuation at close of funding from late summer 2005. The acquisition terms and decision-making rests with two people with our CEO and our lead investor.
The Smart Lemming Diary is a series that chronicles a journey of laid-off worker, who becomes a Vice President of Sales Operations & Marketing for a small entrepreneurial healthcare technology company. For previous entries in this series, click here. For the first diary entry, click here. For the highlighted Smart Lemming Diary entries, click here.
