A highly effective sourcing strategy involves building relationships with successful industry executives, not just company owners. These executives provide credibility, deep industry knowledge, and often bring specific, off-market companies they have relationships with and want to run post-acquisition.

To vet potential investors or acquirers, founders should ask them to articulate their vision for the startup's next five years. Hearing their story told through the buyer's eyes reveals the depth of their strategic thinking and helps assess whether their vision aligns with the founder's, ensuring a better post-transaction fit.

A successful exit is a highly choreographed dance, not an abrupt decision. Founders should spend years building relationships with line-of-business leaders—not just Corp Dev—at potential acquiring companies. The goal is to 'incept' the idea of an acquisition long before it's needed.

Instead of waiting for companies to hire a banker, Zayo's strategy was to build a brand as the preferred buyer in their space. By developing relationships years before a potential sale, they ensured that when companies were ready to sell, Zayo was the first call. This allowed them to get in front of formal auction processes and create proprietary deal flow.

To justify a high acquisition multiple, a founder must prove the business can operate without them. A powerful tactic is showing an acquirer your calendar to demonstrate that a majority of key clients are managed by the team, not the founder. This de-risks the acquisition and proves the company has true enterprise value.

A highly effective exercise for exit preparation is to analyze the diligence request lists and memos from other firms that have previously evaluated your company. This reveals common patterns in buyer questions and concerns, allowing you to proactively address them long before you officially go to market.

Founders who wait until they need to sell have already failed. A successful exit requires a multi-year 'background process' of building relationships. The key is to engage with SVPs and business unit leaders at potential acquirers—the people who will champion the deal internally—not just the Corp Dev team who merely execute transactions.

Don't treat your M&A strategy as a state secret. Proactively sharing a detailed deck with bankers and trusted advisors multiplies your sourcing capabilities. This transparency ensures the inbound opportunities you receive are better aligned with your strategic priorities.

To achieve a high-value acquisition, biotechs must first build a credible strategy to succeed independently, creating a position of strength. Concurrently, leaders should keep multiple potential suitors proactively informed on all business aspects—not just clinical data—to facilitate a competitive bidding process when the time comes.