Selling a startup is a complex process, both financially and legally. It is also the equivalent of several years' work for the founders. To help them through this difficult and demanding exercise, the leading think tank for Tech entrepreneurs has produced a comprehensive and educational practical guide. Instructions for successfully selling your startup.
Mergers and acquisitions boom
Mergers and acquisitions between startups, whether to acquire talent, expand internationally or diversify a product range, exploded in 2021 in Europe. In fact, transactions have increased by 100% in value and 49% in volume compared to 2020, according to a Datasite report carried out in partnership with Mergermarket last December.
In 2021, for example, insurtech Lovys bought Otherwise, a broker specializing in cat and dog and car insurance, writing a check for 520,000 euros and committing to take over the entire workforce. The last few months of the year also saw the acquisition of digital marketing specialist Sendinblue. With the recent acquisitions of Metrilo, Chatra and PushOwl, representing a total investment of 40 million euros, the French nugget is accentuating its international identity.
The explosion in the number of mergers and acquisitions demonstrates the strength of Europe's tech financing model and the capacity of startups to innovate. However, it hides another reality: successful divestment remains a difficult exercise for founders.
Helping entrepreneurs sell their startup
Aware that the sale of a start-up represents a major challenge for entrepreneurs, The Galion Project and Edmond de Rothschild bank have published a practical guide containing a series of tips to help them through the process. There are many reasons for selling a start-up: the desire to protect one's family, a slowdown in activity, disagreement between managers on the strategy to follow, the desire to embark on a new project...
The "Guide de l'Exit : Comment réussir sa cession?" is divided into three parts:
- "Consider the deal",
- "The divestment process,
- "To make the operation a success.
The guide includes advice from founders who have already taken this step. These include Rachel Delacour, Nicolas Reboud, Clémentine Lalande and Edouard Morhange.
One of the main pieces of advice given to entrepreneurs is to prepare for the sale of their company from the outset, even if this is not the ultimate objective. Other elements to be analyzed according to Le Galion: the so-called "earn out" clause, which establishes a link between the sale price and the company's future performance over a given period, and the tax impact of the sale (notably the type of ownership).