A complete guide to prepare your Start-up for an acquisition
Do you have a start-up? Are you thinking of acquisition? Well first let’s know what the meaning of acquisition is. When a company purchases another company by the purchase of its shares or by the purchase of its assets, then it is known as acquisition. Acquisition is one of the best and most popular ways to grow a company. Getting acquired by another company validates your company as well as can solve most of the financial problems. However fancy it may sound but acquisition requires a high deal of skill set and expertise to actually benefit the company.
In UK most of the business culture is based on mergers and acquisitions. There were as many as 1400 M&A deals during the first half of 2019 itself. Most of it was done by IT sectors, telecom sectors, insurance companies, manufacturing companies, etc.
In case of a start-up, it is very important to know and understand your business and if at all acquisition is going to help. Start-ups take years to build and make a name in the industry. If one wants to sell it then the reason should be clear. First step would be to know the reason. It can either be to grow the business and grow more capital or to work on something new. Whatever the reason be, it is important to make a thoughtful decision.
After this one has to look at the upcoming offers for acquisition. Keeping options and looking at them keenly before taking a decision is crucial. Choosing the right company is important because if this does not turn into a good decision then this can turn into a failed deal. One has to make smart decisions and make the right choices. Acquisition is not easy at all. Doing a thorough research will always be in your best interest.
After the acquisition one should know what is going to happen to their start-up. Post-acquisition you will lose the control you had on your company once. The acquirer can now take decisions without your consent as well. You have to follow the lead of the acquirer. If you want to do something new or be in the same company post-acquisition, the decision has to be taken.
In 2020 BYJU’s acquires Mumbai based online coding platform WhiteHatJr for $300 Mn which is considered to be the biggest merger and acquisition (M&A) deal in Indian edtech sector.
Talking about India, the Indian start-up culture has grown over the past years. There has been a clear growth in M&A’s as well. It is just necessary to make the right choices and wise decisions so that it not only helps you but your growth in the company or in anything new one wants to try.