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Early-stage company valuation is a topic we encounter on an almost daily basis, which gives us unique intel into the most common mistakes and challenges. What are the consequences of an inflated valuation before an equity financing round and how to make sure you avoid this mistake? Jan Rezek answers these questions in an interview for Bootstrapping.dk, which you can read here: https://lnkd.in/desbF2ms Have a good start to the week!

Sharing a brilliant article by Zoe Chambers for any founder considering or actively involved in an M&A deal. EVERYTHING written is on the money ( forgive the pun) Whilst all is invaluable, the following observation is one that most should pay particular atttention to, before agreeing to an earnout in a deal. “And one last point I’d make is that the reality is that most big companies screw up M&A integrations. It’s likely that in a year the acquired team will mostly leave, that ambitious revenue goals won’t have been hit (and you will feel it’s because you didn’t get the attention/resources/sales bandwidth etc you were expecting), and the product plan and product integration milestones will be missed. So, where you have discretion, don’t tie too much of your transaction to earn-outs based on ambitious and optimistic goals.” When speaking to many founder, advisers and mentors in this space, the only thing guaranteed in the sale is the initial purchase price paid, after that nothing is and many will tell a tale of woe! Common feedback was that founders shouldn’t buy in to any BS from the acquirer or their own legal team, and instead get what you feel you should receive upfront and not be at the behest of those you have never worked for /with before. If they want to buy, then they will buy and be proud of your position. And make sure your legal team has done M&A before and that there are NO clauses open to different interpretations, especially, when it comes to the earnout proceeds in particular. (Get that in writing from your legal team, after all, you are paying them to get it right!) For anyone that has gone through a sale via M&A - I would like to float the idea of creating an M&A founders working group so as to help others in the future … Good luck to all .. thank you Zoe Chambers and Drew O'Sullivan for sharing

Performing and analysing company valuations and value drivers has been my passion already at the university. At Nordic Innovators Corporate Finance, we encounter such tasks almost daily and spot a few common misconceptions in the Nordic startup/scaleup ecosystem: boosting valuation regardless of a missing underlying logic. The problem connected to this is quite simple - are you going to deliver on the expectations you set?

🚀 'Here’s why ServiceTitan was on the clock to go public' 🌟 Your next game-changer is here! 🌱 Calling all investors and founders: Dive into actionable insights, groundbreaking ideas, and strategies to take your journey to the next level. 👉 Read it now: https://lnkd.in/eb8BK2zc ✨ When ServiceTitan dropped its S-1 notice of an impending public offering on November 18, many VCs likely rejoiced. A successful IPO by the company, which builds operating software for trade businesses, could be what the quiet IPO market needs to start shaking loose. But the timing of ServiceTitan’s IPO may not be entirely based on […] Don’t miss out on this must-read for leveling up in the world of startups and investment. Let’s innovate, grow, and succeed together! #Leadership #Innovation #Startups #Entrepreneurship #Founders #Investors #Growth #Strategy #Success

A quick happy moment/milestone announcement to the network here. Today, we completed the alpha version of our first AI finance employee (FINNX). Sure, she is a bit unstable now, but it is a very emotional moment for us. Now kill this Like button, and comment to show us how much you care ;) ❤️ . Seriously though, we're super excited and wanted to share it with you. We're moving forward to the next step...stay tuned for some videos coming your way. #FINNX, #accounting #finance #startups #announcements

I'm curious to see how other people would evaluate this M&A scenario. You have two companies with very similar products, and I want you to make a prediction. For the sake of simplicity, the facts below are the only information you have. You may make assumptions as you will. Company A: 1M ARR, break even. 20 people. VC funded and raised 5M. 2 founders that own 40%. Company B: 2M ARR, break even. 10 people. Bootstrapped. 2 founders that own 100% Questions: 1) Which company do you consider most valuable? 2) Which company, if you were responsible for an M&A, would you prefer to acquire? 3) Which company do you believe the general market would prefer to acquire or value the highest?

Navigating the intricacies of investor due diligence demands meticulous preparation. Hidden assumptions can be the silent hurdles during due diligence, residing in both founders' and investors' minds. Clarity is key—bringing every assumption to the forefront. Yet, some investors stumble with incomplete fact-checking, overlooking vital elements like financials, HR plans, and employment agreements. Great read on the nuances of due diligence! #duediligence #startupfounders #startupinvesting

What’s the secret sauce behind Capacity's explosive growth in support automation? 🚀 David Karandish and his team at Capacity are making waves in the support automation sector! Initially setting out to secure a $5 million bridge round to reach break-even, they ended up raising a staggering $26 million in their Series D funding. This impressive feat was made possible thanks to the backing of TVC Capital, Toloka.vc, and other investors who believed in Capacity's vision and potential. With this new influx of capital, what can we expect from Capacity next? They’re not just looking at financial growth—they have their eyes set on strategic acquisitions too! It seems like there’s no stopping them as they aim to enhance their offerings and scale quickly in an ever-evolving market. Are you curious about how innovations like those from Capacity can transform your business landscape? 🎯 Let's discuss! Connect with startups aiming for disruptive changes; driving corporate innovation has never been easier. Book a meeting today: https://lnkd.in/dFYwmbHq Join the conversation on how investment drives transformation within tech! #Capacity #SupportAutomation #TechInvestments #StartupFunding #SeriesD #CorporateInnovation #Acquisitions #TechNews #BusinessGrowth #Entrepreneurship Read more about this exciting development here: https://lnkd.in/dv-Yd-eT

New on the blog: Before joining Vertex's investment team, Simon Tiu helped startups navigate the acquisition process and maximize their value at Qatalyst Partners. Now, he gives his tips for founders who might be navigating the M&A process for the first time. Some highlights: 1) Don't rush: It's a marathon, not a sprint. M&A moves at its own pace, and the initial offer might not match the final deal value. 2) Manage your expectations: It's a sad reality that even the most promising acquisition talks will often fall through, for any number of reasons. Stay focused on the one thing you can control — running your business. 3) Take advantage of investment bankers: Bringing in professional help can make all the difference in the world. A good banker has the network to help connect you with potential buyers, and the negotiation skills to optimize the outcomes. 4) Keep communication tight: This is a tough one for those many founders that value transparency. But the fewer people that know about a potential M&A deal, the better. 5) Prepare for life after the deal: Before you sign anything irrevocable, make sure you have a plan for what comes next. Will you stay on at the new owner? Would you rather start a new venture? And if the deal falls through, do you have a plan for what's next for the company? Read Simon's full advice at our blog: #startup #venturecapital #vc #startupadvice https://lnkd.in/gUM6x9tF

Valuing a business is a complex task that requires careful consideration of various factors, one of the most significant being the company’s stage in its life cycle. Each stage—whether it’s a fledgling startup, a rapidly growing enterprise, a mature and stable business, or a business facing decline—presents unique characteristics and challenges that influence its valuation. By adapting the valuation method to each stage, analysts can provide more accurate assessments that reflect the true worth of a business, helping stakeholders make informed decisions throughout the company’s journey, from inception to maturity or exit. #businessvaluation #financialanalysis #valuationmethods #companylifecycle #businessgrowth #investmentanalysis #financialstrategy #businessworth #accuratevaluation