Even if you're doing strategy, at some point M&A is going to be something that is of major consideration. Mergers and acquisitions play a critical role in accelerating growth, and even if you started the company a long time ago, the end will eventually be in mind for an owner.

Episode Summary:

• It’s common for founders to think a successful exit is on the future.
• Leave up to 50% of growth on the table if you don’t consider buying firms
• Growth and expansion often gets to a sticking point without buying another firm
• Speed matters in technology, and M&A can get you over major hurdles
• Buying firms through M&A can help build scale to make an exit more probable and successful.

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Episode Summary

• Expect a reps and warrants provision in a purchase agreement, both buyers and sellers will have reps and warrants. You’re vouching for what you provided is correct.
• Buyers will ask for some type of surety in reps and warrants; expect a hold back. That could be 10% of the cash in the deal.
• Reps and warrants are for pre-close activities; you’re attesting what your providing is true and correct. This does not impact post transaction activities
• There could be options for a hold-back including reps and warrants insurance
• Breaches are exceptionally rare unless the seller is a bad actor

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Benefits of Rolling Equity

   a. Allows seller to retain some ownership and control of the company post-sale

   b. Opportunity to potentially receive additional compensation from the buyer

Potential Risks of Rolling Equity

   a. Risk of reduced sale proceeds if the company does not reach performance milestones

   b. Potentially complex tax implications for seller

Summary of this episode:

• Exchanging the value of the equity in your firm for the value in the combined equity.  Ideally suited for a transaction where there is a potential for another transaction.
• It’s ideal for an ownership team that’s selling-in with a partner for future growth.
• For companies that have hit a growth hurdle, it’s a way to gain cash at close but realize the value of future performance to get to an enterprise value that’s your number over time and success
• Rolling equity gains alignment like few other deal structures as you all want to maximize your investment.
• Returns can be material – 2-3X times can happen. We’ve seen much higher.  You’ll see multiple arbitrage as growth continues
• You’ll need to know how to monetize the equity you’ve received
• Buyers should expect reciprocal due diligence

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Here's what we cover in this episode of Shoot the Moon:

• Where does legal counsel gets involved: NDA, LOI, Purchase agreement
• Roll of an accountant, M&A advisor, client and legal counsel? 
• When do you bring legal counsel? 
• Importance of an M&A lawyer and M&A in IT services specifically: what does a generalist typically miss?
• What are common legal items in tech-services businesses that may not be common elsewhere?  E.g. sign and close, working capital, reps & warrants, asset deals vs stock deals
• M&A advisor focusing on the big picture compared to trading deal points
• How long is the definitive agreement process and how can you speed it up with legal counsel? 
• Fees and what to watch for: rewrites of language compared to meaniful changes, trading clauses, etc. 

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Here are the 6 (& a bonus!) we talk through:

1. The Length of the Deal Negotiations - M&A deals can take weeks, months, and even years to close
2. The Complexity of the Process - Due diligence, legal paperwork, lien releases need to be completed.
3. Quality of Earnings detail: 1-2 months of an intensive audit
4. A debt free transaction and having adequate working capital
5. Legal implication of an asset purchase: terminating employees and rehiring them, notifying customers of the transaction and a change of control
6. What’s in LOI will change
7. (Bonus) Emotional impact of going alone

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Episode Summary:

• What is an intern program and why is it important for IT service leaders to consider one
• Benefits of having an intern program, such as increased productivity, improved customer satisfaction, and potentially positive brand reputation
• Steps for establishing an effective internship program, such as identifying goals and objectives, recruiting interns, developing job descriptions, setting expectations for the intern experience, and providing feedback
• Tips on how to create a successful internship program that will help IT service leaders attract top talent
• Ways to measure the success of the program in order to ensure it is meeting its goals
• Examples of successful internship programs in the industry today

Listen to Shoot the Moon on Apple Podcasts or Spotify.

How Revenue Rocket Leverages Internships to Accelerate Growth

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Here's what we cover in this episode of Shoot the Moon:

• M&A is hard and the most unnatural act in business; expect challenges and some loneliness in the process.
• Answer questions on your readiness for a sale: personnel motivation, financial readiness, history of success
• Avoid common mistakes of over valuing the business, ruling out suitors before discussions, being unwilling to negotiate, not having succession plans in place, waiting for suitors to knock on your door
• Run the business like it’s not for sale and meet sales, forecast, and profit expectations
• There will be changes between an LOI through Due Diligence and into close, work with a professional to get through the hundreds of points of back and forth
• There are options if you don’ sell the company in the first round.
• Be patient through the process – the more niche your business is may require time to find the right buyer. We talk about finding the right strategic, cultural, and financial fit, but timing can be a challenge

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Summary of this Shoot the Moon Podcast episode:

• Picking a vertical market brings a level of differentiation that brings value
• Customers are easier to acquire and keep which increases revenue and profit will increasing the level and value of intellectual property. 
• If buyers are in alignment with vertical markets, they are willing to pay up; not only do you get a premium from enhanced EBITDA, you gain more in strategic synergies
• Firms outside the vertical may want to get in and will acquire greater strategic value
• Industry experts can weather the storms of industry cycles and remain profitable
• Picking and winning a vertical market can be achieved, but work with an expert

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

Listen to Shoot the Moon on Apple Podcasts or Spotify.

Buy, sell, or grow your tech-enabled services firm with Revenue Rocket.