One of the most frequent questions that we receive is, “What are my odds of a successful acquisition?” In analyzing our historical client results, we have found that there are two factors that have outsized impacts on success. While in aggregate the odds are 50/50, if you can answer ‘yes’ to these two questions, they move to roughly 80/20.
- Are founders/employees still with the company?
Our data show that if the company has no personnel (is effectively shut-down operationally) it only stands a 10% chance of being acquired. We used to think that there was a market for the tech of non-operational companies, but clearly that market is small.
- Does the company have revenue?
Companies with less than $50K in annual revenue stand a 15% chance of being acquired. Given our strategic acquirers have very little interest in preserving legacy revenues / business models, we suspect having some revenue is really just a signal for the software working with live, paying customers.
Answer ‘yes’ to these questions, and you stand a ~80% chance of successful acquisition. Answer ‘no,’ and your odds drop below 20%.
Although we are set up to take customers who face these long odds, we generally try to steer them towards alternatives such as our Strategic Partnerships product (currently private beta) or taking a few months, if possible, to put the company in a better position for a successful outcome.