Generic deal teasers that only describe the seller's business are ineffective because they force the buyer to do all the "intellectual heavy lifting" of determining strategic fit. Sellers who tailor their pitch to the buyer's specific strategy are far more likely to advance the conversation.
In an extreme example of tailoring a pitch, one founder identified his most likely acquirer and completely mirrored their brand. He adopted their company values, messaging, and even brand colors on his website. This made the strategic fit so obvious that it led to a successful acquisition.
Standard interviews are poor predictors of cultural fit. A more effective method is to hold an in-person workshop where the buyer and seller teams collaborate on a real-world execution plan. This reveals personalities and problem-solving styles in a way a polished presentation cannot.
The commonly cited 50% M&A failure rate is an understatement. Data suggests it's closer to 90%, primarily because buyers react to inbound deals from bankers. These opportunities rarely align with the buyer's predefined strategic priorities, leading to poor outcomes.
A core conflict exists between buy-side and sell-side incentives. A banker's goal is the transaction itself, as their job ends at close. In contrast, a corporate development professional's reputation and career depend on the long-term, post-close success of the acquired asset.
Sellers who present financial projections with magical growth starting immediately post-acquisition lose credibility. This forces buyers to dismiss the projections and conduct deeper diligence. Presenting a pragmatic case alongside a high case builds trust and accelerates the process.
Sellers often try to justify a higher valuation by projecting revenue based on the buyer's large user base. Buyers view their distribution as their own asset. The seller's team participates in that upside post-close through their new equity, not by inflating the initial purchase price.
The fastest way for a seller to build trust is to be radically transparent, sharing information and data beyond what the buyer asks for. Voluntarily disclosing challenges, risks, and "warts" makes the positive aspects of the business more credible and signals that the seller is not hiding anything.