4 lessons we learned from TechExit.io
The conference was enlightening for anyone looking to buy or sell a business.
Is it weird to be a little bit happy about being able to attend conferences? Yes, the hand-shaking felt very weird, and there were no shortage of sanitizer stands. But other than that, TechExit.io, hosted at the Vancouver Convention Centre, felt like old times.
What didn’t feel old? The talking points. The conference, based mostly on companies trying to pull off exits from the perspective of both the entrepreneurs and the VCs, shone a light on some of the challenges both can run into and how to conquer them.
Here are a few takeaways from the conference that anyone interested in buying or selling a company should watch out for.
“Build the relationships now.” - Laurie Schultz
The former CEO of Galvanize knows a thing or two about making tech deals, having sold the software firm to Diligent in February 2021 for a reported $1 billion.
Schultz delivered the opening keynote in discussion with Beanworks CEO Catherine Dahl. “Build the relationships now, even if you’re not expecting an outcome for 10 years,” said Schultz. “Don’t ever be in a position where you have to get money. Hunt, don’t just be hunted.”
Last year was a huge deal (literally)
According to Charlie Renzoni of Toronto-based Omers Ventures, 13 of Canada’s top 25 biggest exits occurred last year. In addition, 76 percent of the top 25 Canadian exits occurred over the last 2 years, in terms of capital returned to investors. Renzoni detailed that 52 Canadian companies were acquired last year.
Lately, though, things haven't been so hot. “Over the last few months, there’s been a cooling off of the market,” said Renzoni. “We need to think about how to approach it.”
He added that the IPO window is closed right now, thanks both to dynamic interest rate changes and geopolitical instability.
“Don’t have your Range Rover on your balance sheet” - Brad Atchison
Atchison is the CEO of Port Moody-based Univerus Software, which has acquired 11 companies in the last three years. When asked how long deals usually take to complete, he answered with a tentative chuckle.
“I would usually say 60-to-90 days, it’s definitely attainable,” he said. “But you can get into messy balance sheets. Don’t have your Range Rover on your balance sheet, don’t run your kids’ private school through your balance statements—those things ruin deal flow.”
Do your research
Tarique Al-Ansari, CEO of London, Ontario-based payment processing provider Paystone, held court during a session about how to avoid “deal killers.” It turns out, acquiring a company was a lot easier pre-COVID.
“Before COVID, you could just walk into an office and just get the buzz, the feeling,” said Al-Ansari. “With COVID, you have to revert to other things. Talk to employees, actually look up a company’s reviews. We are a reviews business, we put a big emphasis on that. Go to Google, Facebook, and see what employees are seeing on Glassdoor. It’s important to put your finger on the pulse.”