When the Time is Right to Sell a Company
Software entrepreneurs and acquirers should factor in the value of “promise” when determining the best opportunity to make a deal.
By Karen Barnes, SiVal Advisors
Everyone agrees that the best time to buy a stock is when it’s reached the bottom and is at the beginning of an upswing. If only it were that easy to predict.
Buyers of technology companies are looking for the same opportunity. They want to buy at the lowest cost possible with the potential to significantly grow. On the other hand, those looking to be acquired naturally wish to sell at the maximum value attainable, and believe that they should be rewarded for superior: 1) intellectual property; 2) competitive advantage; and 3) overall quality.
Business owners and/or major shareholders have to work hard to determine the optimal timing for selling a business based on when it is most likely to garner maximum value. There is a key ingredient to determining value that is commonly overlooked, and that is what I call “promise”. Here’s how to incorporate the value of promise when deciding when to sell or buy a software company.
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Panel Discussion: Advantage India
Join more than 200 tech executives, VCs, media and students for "Advantage India: Opportunities for the Global IT Citizen" on October 12, 2009, from 6:30-9:30pm at the Plug N Play Center in Sunnyvale. Organized by Think India Research Foundation (TIRF), the event's keynote will be delivered by Arun Shourie, Former Minister, Disinvestment, Communications and Information Technology, Govt. of India. Sand Hill Group co-founder M.R. Rangaswami will moderate a panel that will include Arun Shourie, Navin Chaddha, Managing Director, Mayfield Fund, and a senior executive from a top software company. To find out more or to RSVP, email email@example.com
The Importance of Meaningful Information
Harold Hambrose, author of Wrench in the System, takes a look at the criticality of accurate, real-time information and the role it plays in enterprise software success in this post to the SandHill.com Blog, Voice of the Customer.
Guy Smith of Silicon Strategies Marketing thinks Adobe’s acquisition of Omniture was a smart buy that puts pressure on its competitors. Read why in this post to the SandHill.com Blog on software M&A.
Publish Your Perspective!
SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (firstname.lastname@example.org) and have your opinions published on our site.
Managing Beyond Web 2.0
Companies should prepare now for the day when Web 2.0 morphs into Web 3.0. Read why in this article from The McKinsey Quarterly.
The Week in Review: Sparks Flying
Ellison and Bartz get testy; plus SAP's BBD 2.0 "game-changer," Dell's services play, FASB funny money, and lots of exec moves. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.
Poll: Time to Sell?
In the near term, when will be the best time to sell a software company?
Take our Pulse Poll >>
Last week, readers voted on which hurdles of enterprise SaaS deployment will be the most difficult to overcome.
Give us your opinion and see the results >>
More at SandHill.com:
IT not convinced about the cloud’s green credentials.
Read the most important enterprise software industry news of the week >>
Oversight Systems received $4.5 million.
Monitor the latest software venture capital deals >>
Xerox buys ACS for $6.4 billion.
Size up last week’s software M&A deals >>
Chase Franklin named CEO of online collaboration software maker, Daptiv.
See who’s made it to the top in our list of recent software executive appointments.
Send us your feedback on this newsletter and the SandHill.com site.
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Courtesy of Malcolm Kusher, The Kushner Group
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