#121: How to Play the M&A Game: De-Risking, Building Value and Selling a Company

Today I am joined by Dave Kauppi, an investment banker with MidMarket Capital. We discuss the technology/software industry and what makes it different than traditional companies. Dave specializes in M&A (mergers and acquisitions.) He explains how he got into the tech industry and shares some examples of deals and business models he has seen over the course of his career.

We explore what makes a company worth the investment to a buyer and how you can make sure you use that value to your advantage. It is very important that you do the due diligence for your company so you know what makes you different and how that difference can be leveraged.

What you will learn about this episode:

• Dave’s career background.
• Who MidMarket Capital serves.
• How the tech industry has changed over the years.
• The pros and cons of the recurring revenue model.
• How to convert your company to a recurring model.
• Companies that are accidental software providers.
• How the market dictates the value of a software company.
• Common contingents that are included in tech company sale deals.
• Dave’s Kindle book.
• Dave’s tips for negotiating with experienced buyers.
• Dave’s parting words for the audience.

Takeaways:

It is very important that you keep an eye on the big picture. You need to know what makes you different in your field and how that is valuable to a potential buyer. Then you need to use that value to negotiate terms that are also good for you.

Create a business that is sellable and can go on without you and educate yourself about your industry market.

Links and Resources:

Selling Your Software Company: An Insider’s Guide to Achieving Strategic Value by Dave Kauppi
MidMarket Capital
GEXP Collaborative
Dave’s email
269-231-5772

About Dave:

Dave began his Mergers & Acquisitions practice after a twenty-five-year career with a Multi-Industry background that included banking, high tech, and services. While in the leasing industry he gained a reputation for “finding a better way” through creative deal structure. During one fiscal year, Dave’s region successfully negotiated over $200 million in financing transactions. He was instrumental in negotiating three multi-million dollar strategic partnerships in the service industry and launched and managed a very successful division. In his M&A practice, Dave has completed transactions that range from succession planning exits to finding strategic buyers for healthy, rapidly growing companies seeking a partner to provide scale, to division divestitures, to troubled companies.

His career focus has been in sales and sales management and he has received numerous awards for sales excellence. He brings his strong negotiating and facilitating skills to his practice, successfully managing transactions to a win-win result.

Dave graduated from The Wharton School of Business, the University of Pennsylvania with a BS in Economics with a concentration in Finance. He received an MBA with a concentration in marketing from DePaul University. Dave is a Certified Business Intermediary (CBI), a licensed business broker, and a member of IBBA (International Business Brokers Association) and the MBBI (Midwest Business Brokers and Intermediaries).