In April, Startup Grind Ottawa hosted Dan Beer, entrepreneur and former director of mergers & acquisitions at IBM. He shared his experience from both sides of the table - building and buying companies; the combination of which made for a very interesting conversation on what decisions founders need to take when building a startup.... even in the very early days.
Here is the video of the event.
Some of the most important points Dan raised include:
- Big businesses - like startups - want to find markets with demand for your product. This is the most important thing when it comes down to the decision to acquire. Large B2B companies like IBM always have the "buy or build" talk. 9/10 it's better to go out and buy a company that has demonstrated that they have a product, they have traction in a market and they are generating some revenue.
- Teams that have great chemistry are the most important resource. You need to have other people who will challenge you not just go along with the first idea. The same goes for advisory boards - it's never too early to create one, but you need to make sure they are providing value.
- Proving lineage is the single most important thing when looking to get acquired by a bigger company. More than patents or trademarks, if you can't clearly show that you own your product and who's put what work into it, the opportunity to acquire becomes less interesting.
- Big B2B companies seek to acquire smaller companies not just for their understanding of the new market they want in to, but for their "magic". This is what makes them successful in the first place and you never want to lose that.
- Embracing change will always work out for you.
Thanks to our sponsors: the University of Ottawa (Stephen Daze), Startup Garage (Catherine Geci), and Startup Ottawa. Thanks as well to Robert Decher for the videography and Lindsey McPhee.