The process of startup exit marks the moment when its founders decided it was time to connect the company to a bigger plan. Finding the ideal time to make this move is crucial for post-sales success and, in the current scenario, we are at a time when the market for funds (Venture Capital) has fallen and several opportunities are emerging.
According to one search from KPMG, Brazil recorded more than 1.700 mergers and acquisitions in 2022, representing the second best year in this market. This can be observed by the heating of the economy and the growing option of entrepreneurs to Exit.
As it is a complex process, which involves several rational and emotional factors, only the entrepreneur will know when the most favorable time to do it is. Based on the experience of Paula Lunarelli, CEO of Prevision, we will indicate the paths to help you on this journey. According to her, selling her company “was a difficult decision to make”.
In this article, understand how to determine if it is the right time to sell your startup, details of the process and the importance of organizational culture in this context. Let's start from the success story of the acquisition of Prevision by Softplan.
Startup exit: is it really worth selling my company?
A startup's exit occurs when investors or founders choose to be part of a larger movement and sell the company to another player, whether through acquisition or buyout. The need for financial resources, plans to start new projects and the search for alternatives to grow are among the main motivators for this.
Boosting the company is often the biggest factor in the sale, which may occur partially, which means the founder maintains his stake and continues to be involved in operations. A promising situation arises when an entrepreneur finds a larger and more established partner in the market, enabling the startup to grow with support and more opportunities, which were previously less accessible.
Understanding the market moment is crucial. If mergers and acquisitions are on the rise in your sector, considering exit could be a strategic decision. However, in areas with more timid movements, caution and detailed analysis are necessary before proceeding with the process.
In addition to the market moment, what else should be observed in the startup's sales process?
Before starting the sales process, it is essential to answer the question: do you really want to sell your startup? Aligning decision-makers' expectations and ensuring clear communication are fundamental steps towards making assertive decisions. Also, consider the company's internal financial situation, of course.
Studying product development is another key point. An exit-ready startup typically has an established product vision, clear processes for acquiring new customers and challenging goals, and a committed team.
The most important element is the team. Check whether key people are prepared for the exit process and whether employees are aligned with the company culture. And more than that, understand whether the buyer also recognizes the value of the team and maintaining it in the company. Even during the sale, this aspect continues to be extremely relevant for the sustainability of the business.
Prevision has always invested in building a strong and relevant culture. During the exit process, they made a point of transparently reviewing all the news and answering possible questions. This made all employees more comfortable and confident that the acquisition would be beneficial for their careers.
How to prepare my startup for sale?
Once the main points have been aligned, the preparing the startup for sale. A consultancy M&A (Mergers and Acquisitions) it could be a great way. After all, many entrepreneurs have no experience in this and need to continue growing and developing throughout the process. And, although relationships with the buyer are directly with the partners in many cases, having an external view can save the relationship and help with negotiation points, important aspects for the business.
Furthermore, demonstrating solid performance is very important. Transparent and accurate documentation, highlighting revenue growth and financial indicators, reinforces buyer confidence. Strengthen the relationship with customers is another relevant aspect, demonstrating a robust and satisfied base.
Team preparation must follow the same dynamic. Ensuring alignment with organizational culture, carrying out culture research and implementing retention programs minimizes the transition process. A strong organizational culture is a differentiator and is a criterion valued by investors.
And to conclude, it is worth reinforcing that the desire to sell the startup needs to be aligned between the founders. This relationship must be 100% aligned from the first preparation steps. Therefore, corporate issues should not be left to resolve at the end of the process.
Established organizational culture is a differentiator for a successful Exit
A organizational culture, made up of beliefs, values and behaviors, plays a vital role. A strong purpose, sense of belonging and joint mobilization are essential. Companies like softplan, when making acquisitions, they value strong and aligned organizational cultures, prioritizing synergy with the acquired company.
Prevision's inspirations and international benchmarks were the same as Softplan's, which demonstrates that the companies' visions were extremely aligned. This is the basis for all decisions to be made in the future.
Furthermore, there is trust in people. Prevision, in addition to being in the same city as Softplan's headquarters, found people with aligned purposes and values in the investor. For Paula, “that’s why the partnership works so well.”
In short, when considering the exit of a startup, one must carefully evaluate the market moment, align expectations, validate product development and strengthen the team. Having consistent visions and values is the difference that drives success in this process.
According to Paula, “The Prevision is proud to be part of the largest Civil Construction ecosystem in Brazil. In collaboration with Softplan, uniting teams and products, we are achieving even more significant achievements together. And this is just the beginning of a very successful journey!”
Continue to stay informed here with us, on the Visão Softplan Portal. Take the opportunity to better understand the prospects for next year in the article Startup Market 2024: what to expect?
