F2F #53: Filtering out M&A enquiries
One email template has helped me to filter out tonnes of useless M&A requests.
September is that time of the year when everyone comes out of the woodwork to enquiry about whether MarsBased is for sale. It usually spikes in September and slowly dies down towards the end of the year. I don't know if it is true for other companies, but after almost five years of this happening, it doesn't feel like a coincidence anymore.
My guess is that they've got leftover budget and/or they've been turned down by their primary targets, so they're looking to move fast to find other potential acquisitions.
Anyways, one of the best tips I can share with you, from founder to founder, is this tweet by Marc Köhlbrugge:
Getting a lot of M&A interest the last year or so, but often it's a huge waste of time.
— Marc Köhlbrugge (@marckohlbrugge) April 26, 2022
People either don't have the funds ready, don't know how a proper M&A process works, or are lying and and doing competitive research instead.
Using this reply now to hopefully weed out most pic.twitter.com/TIMANpAAeI
For my convenience, and yours too now, I adapted it back in the day to text, so I could send it to everyone who reached out to me with M&A enquiries:
Hi X, thanks for reaching out.
I get a lot of M&A inquiries and most end up being a waste of time because of mismatched expectations. So please forgive my curtness, but can you please answer the following:
Annual revenue for MarsBased is projected to hit 3 million euros this year and we won't take any offer for less than eight figures, all cash upfront.
* Does this fit within your budget?
* What's the source of your funds?
* What, if any, previous acquisitions of this size have you done before?
I'd be happy to share more details about our business if we're on the same page.
The trick here is that this email won't get you any kind of information from the potential M&A acquirers. In fact, its job is to fend off virtually everyone who's just nosing around.
In the three years that I've been using Marc's email, I've sent it to hundreds of companies in response to their approaches. Only twice, I've heard back from the person and it led to somewhat productive conversations.
I don't know if it'll lead me to the company who will buy MarsBased, but it has spared me from countless endless email back and forths or inconclusive calls with semi-interested and/or less-than-semi-interesting parties and M&A voyeurs. And that is a lot of help.
Thank you, Marc!