Tuesday, November 01, 2005
Since most exits are acquisitions, not IPOs, one has to seriously consider overtures from BigCos. That said, some companies use fishing expeditions to learn more about your business with no serious intention of ever making a legitimate offer. Ed Sim lays out a set of questions you should ask BigCo as well as ask yourself that is a useful list. Having been on the BigCo side of this equation, I can tell you that the fishing expedition often isn't intentional. One set of people inside BigCo might be completely serious about their overtures but get blocked by some other person/team in BigCo. This is more likely to happen at BigCo if they don't have a structured process for acquisitions. Thus, one additional question I'd ask BigCo is "how does BigCo's acquisition process ensure that there is internal buy-in before getting into deep discussions with SmallCo?"