SaaS Primer

Tuck-ins are classified by their primary purpose or benefit.  In many cases a great acquisition fits multiple classifications. Product Expansion/Improvement We typically target smaller companies with unique technology, core expertise, and some reference customers.   An acquisition that acquires a best in class feature or module addition combined with the key people who built it and some great logos accelerates your product roadmap years with a higher probability of success. The real trade off in this acquisition type is build, partner or buy decision.   When you think of building, remember its not just an MVP version that is required.  You need to build the MVP, get customer feedback, and then sell and implement a group of reference customers.  When you think partner, its not just finding, negotiating, papering and announcing the partnership, it is also educating the partner and then selling and implementing a group of reference partners.  ...

I have complete a number of cross-border deals both as an operator and investor (in Canada, Ireland, India, and China) and pursued deals in a number of other European countries.  Most were on the buy side but a few I was on the board of the selling entities. Some observations: More difficult to execute because of the added complexity Different laws and regulatory requirements GAAP does not equal U.S. GAAP Different nomenclature and jargon (for a trivial example, in the U.K. a term sheet is called the Head of Terms) Consume more time and transaction costs Cultural and geographic differences  Negotiating style differences (in a few cases blunter than in the U.S. but in many cases less blunt) Potentially language differences, if not in the deal documents but in the diligence materials Distance and time zone differences make it harder to deepen relationships quickly Typically you have two law firms (your incumbent M&A law firm and a local firm in the geogr...

I have been involved as either an entrepreneur or investor in north of 20 tuck-in acquisitions. Some were transformative in terms of talent, Total Addressable Market, key product capabilities, key customer logos, or revenue growth (or all five).  Others have been modest to less than worth the deal.  Successful tuck-ins require blood, sweat and tears to work.  A former executive colleague at a company were we did seven acquisitions said "We did seven acquisitions none of them right".  Yet, two of the seven propelled the company to a very successful IPO. Some of my criteria and patterns for success are: strategic or financial fit  Strategic fit meaning directly on the Product Roadmap and not only accelerates the product development timeline but optimally the acquisition of reference customers Financial fit would mean very accretive without revenue synergies (for example, buying a book of business that could be converted to your platform right away) cultur...