Nivedita Bhattacharjee · · 3 min read4 things to consider if you’re prepping your startup for acquisition
From L-R: Alok Goel, Miten Sampat, and Sanat Rao. Photo credit: Tech in Asia.
If there’s one big, open secret in the world of startups – in India and around the world – it surely is that not every founder will live to take their company down the IPO route.
For every Facebook and Alibaba, there are thousands of others that either get bought out or, if unlucky, have to shut shop. However, as the industry matures, consolidation has become a much sought-after road to exit. But how does one build a company for an acquisition?
Industry experts discussed the elusive road to exits today at Tech in Asia Bangalore 2016. Here are four tips they shared:
1. Don’t look for money
Photo credit: Freecharge and Redbus, both of which are among the most successful exit stories in India. Freecharge got bought by Snapdeal, while Redbus was bought by Ibibo Group, a subsidiary of South Africa’s Naspers.
2. Know who can buy you
How a company builds itself up for potential exits should depend on what timeline it is looking for to sell itself. So, if you’re looking for a deal in the next six months, your strategy should be different from how you’d do it if you were planning to go on the market in two or three years.
“If you are looking for an exit in six to 12 months, then you’re probably thinking of solving one problem. Solve for it and go after the big names,” said Alok.
“But if you are thinking of an exit in three years, the startup market will change so massively that your one problem solving may be irrelevant. In that case the right frame of mind is to build something inherently valuable that will have relevance years down the line.”
4. Be honest with yourself
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