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20 Tips to Maximize Private Equity, Investment and Strategic Buyer Outcomes (Part 2: Before the Process — TAM and Scenario Planning)

08/27/2019 By


Many solution providers’ executive teams that we have observed are not as prepared to enhance their chances of optimal private equity, investment and M&A outcomes. This Spend Matters Nexus series provides insight from the thousands of hours we have spent working with private equity groups, CEOs and boards to evaluate acquisition targets — and with sellers to optimize exit scenarios and outcomes in the procurement solution market.

In the first installment of the series, we provided five recommendations to prepare wisely for an eventual process.

Today, we continue the analysis with our next tips to consider as the actual process approaches (i.e., “pre-process” tips). These include instructive recommendations on taking the time to build a total addressable market (TAM) model and scenario planning/rehearsing the actual process itself, including how to prepare and interrogate a “data room.”

Later in the series, we will explore the deal process itself, offering tips for stewarding the effort and driving to an optimal outcome. Part 5 will focus on three areas: investment bankers (where they add the most value vs. not); the benefits of established “added” metrics to track the business; and explaining and justifying competitive differentiation in a manner that investors will believe (or not). In Part 6 we will concentrate on the importance of fleshing out an acquisition strategy and roadmap — and “knowing the end game,” in terms of likely future buyers after the next phase of the company’s growth. Part 7 will follow up with the ideal exit process and outcome with Part 8 focussing on knowing your own personal and company weaknesses. Part 9 will conclude this series with tip 20: Defining the 'Post-Close' Plan.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

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