Securing an acquisition through cold email 📩

Hello, and welcome back to another edition of The Wise Exit!

In today’s newsletter:

• 3 lessons that we can learn from Laura Roeder and her exit from MeetEdgar ✍️

• A brand new episode of the Cashing Out podcast 🎧

• Our round-up of interesting M&A transactions from the past week 💰

Let’s dive in!

At the end of 2021, Laura Roeder sold her burgeoning social media tool, MeetEdgar, to SureSwift Capital.

Early last year, Laura wrote an excellent Medium post about the sale and how it materialized.

The post is packed with lessons, but today we’re covering three of the key takeaways that any founder can apply to their own situation when preparing for an exit.

M&A Lesson 1: Do the Research (And the Reading!)

Laura is a huge proponent of doing the research before diving into the process.

She put in the work to arm herself with knowledge for the process ahead, consuming all of the books, podcasts, and resources she could on selling her business. It paid off.

She writes, “I started out by reading all the books I could get my hands on about selling your business,” and that, “after doing my research, I had a pretty solid idea of the type of buyer who would be the best match for my company and how to pitch them.

Laura recommends a few resources that she says helped her tremendously:

• The Art of Selling Your Business by John Warrillow

• Before The Exit by Dan Andrews

• Podcasts that focus on prepping business owners for their exit (check out the list of such podcasts we recently assembled on our blog 👈)

M&A Lesson 2: Identify And Engage Your Buyer

One of the many reasons Laura’s story is unique is her use of cold email in sourcing MeetEdgar’s eventual buyer.

Popular opinion says you can’t sell a company, it needs to be bought. Laura flew in the face of that adage, and was proactive in sourcing, and materializing, the exit she wanted.

Laura searched for micro-PE firms that were buying up SaaS businesses (literally only using Google!), compiled a list, found their publicly available contact information, and sent out a brief cold email gauging their interest in buying a company like MeetEdgar.

The simplicity of the process should be inspiring for any founders taking notes! Sometimes the quickest route to a sale is throughout transparent, proactive outreach.

M&A Lesson #3: Spend Time Leveling Up Your Negotiation Skills

Negotiation, like any skill, can be improved upon by seeking out and studying great resources and frameworks.

One such framework that Laura specifically calls out is ‘BATNA’ (Best Alternative To A Negotiated Agreement).

“Basically, your BATNA gives you the ability to walk away from any one deal,” Laura explains, In my mind, my BATNA was actually holding on to my company. Edgar was profitable and we had a team running it that required very little of my time, so it was “easy money”.

When the time for deal-making comes, try to determine your own BATNA, and spend some intentional time arming yourself with the tools and frameworks that will secure the best outcome possible for yourself and your business.

Having a well-defined BATNA is a great way to keep yourself honest during incredibly emotional times of selling your company.

Cashing Out: The Importance of Building Personal Relationships In M&A

Matt Blumberg is a former management consultant, and co-founder Return Path, a company that provides email intelligence solutions for marketers.

Matt was approached four times to sell the business, and after four failed attempts for various reasons he finally completed a sale to Validity, a consumer data company, in 2019.

In our discussion with Matt, we cover how:

• Creating better personal relationships with acquirers can de-risk M&A transactions

• To bounce back from a failed M&A transaction

• Building a company with a work/life balance in mind can lead to a great outcome

M&A News 📰

• Generative AI: LimeWire, known for its past notoriety in p2p file sharing and its role in music piracy, is making a surprising entry into generative AI with the acquisition of BlueWillow.

• Hospitality: Foodbomb, a six-year-old wholesale food marketplace, acquired by hospitality platform Ordermentum for an undisclosed sum.

• Scooters: Bird Revs Up Expansion Strategy with $19 Million Acquisition of Spin Scooters from Tier

• Music: DistroKid bolsters artist toolkit with Bandzoogle acquisition

That’s it for this week.

Tune in next Wednesday for another set of M&A lessons, and have a great rest of the week 👋