Positioning your Company to be Bought, not Sold

December 2, 2016, Posted by Anton Papp

Engineering Premium M&A

Quite often, premium M&A valuations require providing value to a would-be acquirer prior to a transaction. Forgetting this one bit of advice is the reason that so few tech entrepreneurs are able to sell their company at a premium valuation.

As the former Vice President of Corporate Development at Teradata and a long-time tech investment banker, I am constantly amazed at how so many startups fail to develop significant business and corporate development relationships well in advance of a potential transaction. These relationships can be mutually beneficial today by creating new sales channels, increasing credibility with major accounts, and accelerating R&D through collaboration. Importantly, they can also sow the seeds for potential strategic exit options down the road.

I’m now a partner at Catapult Advisors, an investment bank headquartered in San Francisco, where I head up our firm’s Smart Data Initiative (mapping and advising companies in the broader big data and analytics market on M&A and capital raising). We believe in building relationships and often take a long-term approach to helping our clients achieve optimal exits.

We often advise entrepreneurs to develop relationships beyond simple technology integrations or co-marketing agreements. Think instead about resell or OEM agreements that provide tangible, monetary value for both parties. This type of relationship can pay off in the short-term, but can also turn individuals within a business unit at the partner company into an acquisition sponsor with a financial incentive for buying your company.

At Catapult, we advise our clients on how to think through these and other strategic challenges. By developing a relationship with a company early in its lifecycle, we provide ongoing advice in a dynamic market and make meaningful introductions to the right people at the right time.

By helping clients develop these strategic relationships, increase their market presence, and grow visibility with possible partners and acquirers, we’re working to help clients achieve that premium exit. If you’d like to learn more about Catapult’s Smart Data Initiative, you can email me at apapp@catapultadvisors.com.

About Catapult Advisors and our Smart Data Initiative

Catapult Advisors is an investment bank based in San Francisco that has been providing M&A, fundraising and corporate development advisory services to emerging software companies for 15 years. Our Smart Data Initiative’s goal is to better understand the broader “big data and analytics” market, it’s 1,000+ private companies, the interests of the large strategic acquirers, and the interests of growth-stage investors which enables us to provide value-added M&A and capital raising services. The initiative is led by Anton Papp and Ron Lissak, a 30-year veteran of the investment banking industry and previously head of private placements for Bank of America. Market intelligence and transaction support is provided by former 451 Group corporate development research analyst Ben Kolada.

To learn more about Catapult’s Smart Data Initiative, click here.

About the author

Anton Papp is a Partner at investment bank Catapult Advisors. Previously, he was Vice President of Corporate Development at Teradata, responsible for global M&A and strategic investments. Before Teradata, Anton was Vice President of Corporate Development & Global Alliances at enterprise marketing software provider Aprimo, where he orchestrated Aprimo’s sale to Teradata for $525MM. Anton was previously an investment banker and began his career as a Naval Aviator flying the F-14 Tomcat. Anton holds a BSEE from Boston University, an MBA from Columbia Business School, and is a graduate of the Navy Fighter Weapons School (“Top Gun”).