The importance of building trust as it relates to technology acquisitions
I’ve seen way too many acquisitions break-down because of a lack of trust. Acquisitions are very rare as exits (contrary to what you see on the Linkedin newsfeed……a compilation of best hits), but early preparation is critical to building trust. One easy way to start the prep is to develop a list of a company’s top 10 acquirers, an executive contact at each company, and to keep in touch, regularly.
Why? Trust is paramount to every acquisition, and there are no shortcuts to developing trust. On the other side of the table, executives and CEOs at the acquiring company often bet their career on the larger acquisitions. Technology can accelerate a company’s growth, or path to profitability, but most acquisitions fail not because the technology is sub-par, but because it never sees the light of day during the integration process. The technology is not valuable without a commitment from the people that built it and are leading it that they will work together. Trust is a big part of this.
What you’ll often find with the lists is the top 10 acquirers have a high degree of overlap with your start-ups customers, strategic partners, or competitors. These are folks that are worth investing time into, in the normal course of business. If they don’t have time to meet with you, send them a short company update every month!
Oh yeah - make sure the CTO of your company is also involved. Unfortunately, CEOs are sometimes redundant for technology acquisitions, because most of the value is in the technology, and the people that built the technology. A mark of a good CEO is one that is willing to put their ego aside and step down, if/when it is indeed best for the business and the people.
Note: there are several type of acquisitions, and this is a generalization. More on this to come in future posts.