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    M&A Advisory

    For Micro-deals: US$1M to $10M

    Focus: sell-side SaaS Startups 

     

     

    No Great Deal is Ever

    Made Alone

     
    VFA makes a deal simple & attractive to both the seller & the buyer so they both get what they want without leaving money on the table.

  • FQA

    First find out whether you're looking for a broker or an M&A Advisor

  • Micro M&A Advisory ($1M+) -

    How It Works

    When Selling Your Startup

    1

    Deal Strategy

    • Timing
    • Valuation & pricing
    • Deal structure 
    • Buyer strategy
    • Momentum building
    • De-risk
    2

    Financials & Records

    • P&Ls, expenses accounts
    • Pro-forma statements (projections)
    • Revenue reports, budgets
    • Financial schedules
    • Sales ready + data room
    3

    Inviting Bids

    • Timeline 
    • Objectives
    • Selection process
    • Buyer trust-building
    • Initial buyer due diligence
    4

    Letter of Intent

    • Negotiate terms & timing
    • Pricing consideration
    • Transaction structure
    • Exclusivity
    • Bring in a lawyer or work with yours
    5

    Due Diligence

    • Due diligence on the buyer
    • Due diligence for the buyer
    • Virtual data room
    • Don't close a deal without due diligence 
    6

    Final Offer

    • Negotiate final terms 
    • Closing does not finalize until the money hits your bank

  • Step 1A: Exit Tax Planning

    available for Canadian sellers

  • Additional Considerations

    M&A process is complex.

    You will not be able to see everything when you choose to do it alone.

    Valuation

    • Services-based startups: 1x to 2x of annual revenue (3x to 5x happens).
    • CPG Ecommerce: 3x to 6x of annual revenue or multiples based on EBITDA.
    • SaaS: 5x to 10x of annual recurring revenue (ARR), (20x to 30x of ARR happens).

    Negotiation

    • You can't negotiate well if you don't have an exit strategy and proper planning.
    • You can't negotiate well if you don't understand the buyers.

    Pre-Sale Planning

    * This is a critical part for deals do fall apart at the last hour. Strategy first. Then Planning.

    Post-Closing Strategy

    * How to manage your fund and "break up".

    M&A Advisor vs Business Broker

    • Traditionally, M&A Advisors (investment bankers) are for mega. deals ($100M and up) and business brokers are for smaller deals. 
    • Now with the remote work movement, many independent M&A Advisors are open to micro deals (usually $5M and less).
    • A micro M&A Advisor usually guides you through the M&A process proactively.
    • A broker finds you the buyers with limited scope. The process is passive.
    • To find buyers, you can list on platforms like Microacquire (I'm an M&A Advisor on Microacquire).
       

    M&A Advisor for Buyers

    • If you look for guidance in the acquisition, you will want to consider two to six more steps in the M&A process. 
    • One is your acquisition strategy before you start to look for a startup to buy.
    • Another is your financing options. If you involve your traditional bank, they may have a very limited view of the valuation.
    • You will also consider your post-acquisition integration.
    • Most importantly, do due diligence on your seller's finance, IPs including patents, copyrights, trademarks, etc.

  • Four Telltale Signs to Avoid

    These Signs Often Affect the Closing Rate of The Deal

    Seller Fails to Prepare

    • Fail to sell on the way up.
    • Fail to have clean and solid financials & records for the buyer due diligence.
    • Fail to go through the process, physically and emotionally sometimes arduous.

     

    No or Poor Due Diligence

    • Seller wants to sell desperately and skip the due diligence on the buyer.
    • Pooer data room preparation.
    • Buyer not doing proper technical due diligence.

    Seller is Confused

    • Seller is not 100% sure for the "WHY" to sell
    • Seller is unsure of the target buyer.
    • Seller is confused with the process.
    • Seller's wants and actions are in conflict.

    Valuation Attachment

    • Seller is not flexible in terms of the price and the terms.
    • Seller focuses only on the price and ignores other critical parts of the deal.

  • Ready to Work with Me as 

    Your M&A Advisor?

    Before You Reach Out, Consider the Following:

    M&A Advisory services is an investment.

    Consider your ROI

    (return on investment).

    Typical advisory fees range from $30K to $80K for deals between $0.5M to $3M.

    Still want to have a chat?

    Book a consultation zoom call for 30-min at $185.

  • Free Resoruces on M&A

    I'm an M&A Advisor on Microacquire.

    You can find me there if you list your startup for sale (free) or

    if you sign up as a buyer.

     

    Learn M&A fundamentals completely free.

    Click the link below.

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