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Ask HN: How would I sell my company to RackSpace, EMC, RedHat, VMWare?

8 points by throwaway_fish ↗ HN
OK, say I had built some really great software that met a real market need (let's steer away from whether or not that is actually true, assume it is) and this software is obviously very valuable to the companies named in the title.

Now, I want to sell the company to one of them.

Presumably I need to be able to make contact and pitch the company on why they should acquire my company.

How the heck would I do that? Do I just go and look up the people that it seems most likely to be the people who would drive an acquisition and ask them for a meeting?

Has anyone done anything similar? Anyone got any ideas or pointers on how to succeed in doing this?

16 comments

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eschutte2
With the disclaimer that I haven't done that, you would do it by getting press that their executives notice that leads to meetings, or (more often, and in tandem) your networks overlap and people are talking about you, which is why it's so valuable to have VCs with a vested interest in your success (their networks overlap heavily with CxOs).

Alternatively, they could discover and try out your offering and decide they like it enough to buy you.

Pitching the company on why they should acquire you doesn't seem like a position you want to be in, but I'm sure it can work. Maybe someone here has some stories.

People I've known that have done it usually make the personal connection first through mutual interests (e.g., clubs) and then "oh hey, I have this company you should buy" flows from there.

throwaway_fish
>>Pitching the company on why they should acquire you doesn't seem like a position you want to be in

Curious to know why not? Seems exactly what I want...

lbotos
Big fish eat little fish. Sure, You could be "enticing" but if you are trying to convince them to acquire you, you are already behind.
GFK_of_xmaspast
If they want it they'll call you.
[deleted]
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throwaway_fish
Seems a little indirect. I've done plenty of sales in the past and it seems to me that in many cases things need to be actively sold rather than waiting for a buyer to turn up.
true_religion
My opinion is a bit uninformed as I've never sold a company for any significant price, but I can't imagine a company with 1+ billion market capital making a bid on a smaller company that has less than $10 million revenue.

At that revenue, you should be able to contact someone to do M&A for you or get you in touch with the business development teams. You won't necessarily have to do this... if you don't know how already. Just pay someone.

Lordarminius
This is the correct answer. Large companies are always on the lookout for possible competitors as well as businesses with a complementary model. When you gain traction you'll get the call(though you can assist the process somewhat, as pointed out above)
kogir
Get a substantial number of their current (or now former) customers using it.

Until you can demonstrate your offering is real and the market thinks you matter, they won't think you do. There's really no way to skip this step unless you already have a personal relationship with someone who can drive the acquisition at the acquiring company.

vgeek
Facebook ads? Make a LP specifically for said purpose, stack geos and jobs. You can waste a lot of money, but it may create awareness/interest for your product with a relevant audience.
nopzor
You want them to be aware of you already. Ideally, a few desks should have already been pounded by frustrated people at $buyer, while screaming "damn those guys at $seller!".

If you haven't demonstrated traction (eg. have users, customers, revenue, etc) it's going to be hard to get them interested. "market need" is just the tip of the iceberg.

(Unless your software is something truly insanely special and ground breaking, in which case kudos to you I guess)

Hiring an investment banker to run the process and shop you can be helpful. But if there's no "business" around the software you've created, then they probably wouldn't know where to start ;)

My $0.02..

throwawaypdx
Two quicks things. What is the time pressure to sell? Do you share customers with them or do they consume your product directly?

If there is lower time pressure and their customers are your customers, maybe the partnership route is a better first step (look for BizDev folks). In those talks it should become clear how important you are to their business, or not.

a-saleh
You might want to investigate Michael DeHaan's story with Ansible? But I am not sure how to get the inside informaition.
alain94040
As the saying goes, "companies are not sold but bought".

Which is a cute way of saying: if you are successful, and play in another company's sandbox, they will eventually talk to you.

So don't worry about cold intros. That's not how it works. You can't convince someone who doesn't know you to buy you. Succeed first. That will put you on the map. Getting the right intro is frankly the least of your challenges.

johns
1. Partner with them. If that goes well, they'll be clamoring to buy you. This also gets you an internal business unit/advocate to push for something.

2. Talk to their corporate development team. Their job is to buy companies. Hopefully they've reached out to you. Otherwise, you likely don't have any leverage.

3. Hire bankers to find you other potential bidders to drive the price up. The good ones will know all the corp dev people.

FlopV
I worked at EMC and we had a group that looked at startups to acquire. Feel free to reach out to me directly and I might be able to dig up a name to put you in touch with.