Hey, there, Dan Martell here, serial entrepreneur, investor,
and creator of SaaS Academy.
In this video, I'm going to share with you
how to conduct your first call from a potential acquirer.
So if you've ever had somebody reach out, maybe
be interested in collaborating, partnering,
but you really know it's a acquisition potential
conversation, I'm going to share with you guys
how to run that first call in this video.
And be sure to stay to the hour.
We'll tell you how to get access to my fundraising like a pro.
You may not want to sell, but instead use this opportunity
to raise a bunch of capital as those SoundCloud rappers say,
you've got to go get that bag.
I'm going to teach you how to do that.
So be sure to say to the end, where
I'm going to tell you that.
And let's get this started.
So when I was building my company Flow Town,
we had a bunch of companies reach out, they wanted to talk,
et cetera.
And for me, it was interesting finding out that people,
just like it's their job, like corporate development
and a big company to actually go find potential acquirers.
So at first I was super excited.
And I wanted to get on the call.
And I remember my first call ever.
It was with somebody from Google.
And it was crazy.
I remember now.
And I'm going to teach you guys how not to do this,
the amount of information I gave them in research,
and the way we thought about the market,
and how our code worked, and all these different things that I
should have never shared.
So if you're worried on your next call potentially
giving up too much or showing too much interest, et cetera,
I'm going to walk you through specifically
how not to do that.
Just recently I had one of my coaching clients
AD, from Conversio, have the same opportunity.
Now, I can talk about public, because they actually got
acquired by Campaign Monitor.
But what I'm going to teach you today
is the framework that I coach my clients
to use on those first calls that AD
used to create not only interest and demand
and running a process, because exit timelines is something
that I teach as part of the A.C.E.S Growth
Engine, the perfect exit.
It's kind of the outcome that I think every software
entrepreneur wants to create.
We need to do the first call right.
So I'm going to walk you through the five steps
to make sure that you absolutely crush it.
One, fit, price, and motivation.
Those are the three things that I'm trying to assess.
If I'm getting on a call with the potential acquirer,
in that conversation, I'm trying to maneuver my way
to discover those three things.
Number one, is this company even if fit
from a culture from a values point of view
from maybe they're just not even looking to buy a company,
they're just kind of kicking tires
or they're doing market research?
So number one is just fit.
The second thing is I want to make sure
that if there is potential for something
that their valuation or the way they
think about our company, the price--
and that's a tough one to get to--
we're on the same page, because there is nothing worse, more
demoralizing, wasting of time than going
talking to a potential acquirer, going
through the process, due diligence.
I've seen companies get all the way twp, three months showing
them their numbers, having them talk to customers to find out
that the price they were at was dramatically lower than where
you want it to be.
So we want to essentially suss out the potential for the deal
size, like what kind of number?
If we were to partner, what kind of investment
are you guys looking to make in our organization for us
to collaborate?
That's a really nice way of saying,
what are you willing to pay us to buy is?
So you can use that.
And then the third is motivation.
Are these people truly motivated,
or are they just trying to do some research in the market?
Right off the bat, the foundation for the call
is fit from a values point of view.
Price is the deal size in line with what
we're thinking, because then you can dismiss it.
And three is motivation.
Are they really looking to make a purchase decision,
or are they wasting your time?
Number two, get them talking.
So my rule, think about it as the 20/80 rule.
80% of the conversation should be them talking to you,
where a lot of founders make the mistake on a first conversation
with potential client is they want
to give the information that would hopefully
get that company interested in buying.
Here's the way I think about it in any sales conversation.
If you're a professional sales individual,
you are speaking 20% of the time and 80%
is the potential prospect.
We're asking questions.
We're prompting.
We're saying things like, hey, I'm
just curious, what's happened in the market for you guys
to decide to reach out?
Have those questions to go to just get them talking,
because of what you're trying to do
is you're trying to reverse the process.
Instead of them trying to discover everything
about your company, you're trying to discover everything
about their company.
So you know if you're doing this right, if they're talking
more than you're talking.
If you're talking the most, stop yourself.
Breathe.
Slow down.
Hit them with a question.
They answer.
Great question.
Acknowledge it.
Hit them with another one.
And just keep that process going.
Number three, prepare talk tracks.
So here's what I know, is if this
is a true potential acquisition, they're going to ask you
questions about price, team size, product strategy,
all these different things.
Just assume that they're going to ask you these questions.
And write those questions down.
When I went through the process exiting Flow Town,
I then did it again with Clarity.
I then did it again with other companies.
I've invested in.
I've had nine companies that I coached this year alone
exit their companies.
And what I teach them is to prepare those talk
tracks so that when the question comes up
you're not blindsided, that you've already
prepared your answer.
That is enough to give them some confidence and insights,
but it's not giving away the farm.
So just be sure that you prepare your talk tracks.
And make sure that they don't give away too much insight,
because you don't know, they might
be hanging up the call with you and going and talking
with your competitor, because they're about
ready to write a check to invest in them.
And they wanted to do some research.
You do not know where your information you're giving
to them is going to end up.
So you need to prepare those questions and talk tracks.
Number four, role play.
So I actually have a video on this on playing
that you guys can go check out.
I'll link it up below, but one of the things that I'm
a big fan of is, especially with meaningful conversations,
a potential acquirer, a key hire,
fundraising is you want to role play the scenarios so
that you can get used to--
because you never know, maybe the other person
is just going to hit you from the left side
with a weird question then a right.
And then you're just like whoa, whoa, whoa, what's going on?
And you might inadvertently disclose stuff
that you shouldn't disclose, like we only
have 60 days of runway left.
Just so you know, if you tell that to a potential client,
they will just drag their feet and call you back in six weeks,
just so you know.
So you want to role play.
So if you have a co-founder, you have
somebody that's helping you on the M&A side, a partner,
have them ask the tough questions that you prepared.
And role play and have some fun with it.
It's kind of like practice before the big game.
You would never assume that somebody
would go into a competition or the Super Bowl
and not practice off the field.
And then when they're on field, they're
just executing the play.
That's what you want to do from a role playing point of view
so that you're prepared, you feel at ease,
you're comfortable, and you don't make a mistake.
Number five, stick to the time.
So one thing I believe, and this is true
for fundraising or an exit conversation,
et cetera, is you don't want to seem needy.
One of the biggest ways that you can seem needy
is that if we've allocated an hour for the conversation
or 30 minutes and you as the founder are
totally cool going long.
Here's what I would do instead.
It's you don't want to cut people off,
but you can just say at the being the conversation,
it's like, hey, I notice that we got 30 minutes in the calendar
to go through this.
Appreciate the time.
I just want to let you know I do have a hard stop, because I
have another conversation-- similar to this
is what I like to say-- similar to this with somebody else.
And they're like, oh, yeah, no, perfect.
Great.
Thanks for the time, et cetera.
And you might even say like towards the end of the call,
if it's 60 minutes, you might say like, hey, I know
we only have 15 minutes left.
So you want to set the constraint around the call
so that you can let them know, it's like,
hey, I don't need this call.
We're building the business.
We're not interested in selling.
If you want to buy us and partner with us
so that we can do more together, great, but this
is not my priority right now.
My priority is building the company.
You need to protect your time so you don't come off as needy.
I just seem to often a 30 minute conversation
turns into four hours.
And the founders like, oh my god, it's
such a great conversation.
We talked for four hours.
It's amazing.
They're totally going to buy our company.
And I know in my head, they just did all the insights.
They got all the information.
And they're saying, we should just build this ourselves.
We don't need to buy it, because you gave them everything.
You gave them the milk.
And they didn't have to buy the cow.
So make sure that you stick to the time in your conversation.
So real quick recap on how to conduct your first
call with the potential acquirer.
Number one, you want to assess the fit, price, and motivation
of the potential buyer.
Number two, you want to get them talking.
Number three, you want to prepare your talk tracks.
Number four, role play before the call.
Five, stick to the time.
If you do those things, you will become a world class negotiator
and be like one of my other nine clients that
exited their companies this year like AD two campaign moderate.
These are life-changing moments.
And if you can just slow down and let the process go,
it could mean multi-million dollar difference
in that specific outcome.
So as I mentioned at beginning of the call,
I want to share with you guys my Fundraising Like a Pro
Framework.
I break fundraising and capital raising
into three distinct phases.
For example, the pre-marketing phase,
you've probably never heard of that.
Go download.
Click the link below to download and get access
to that specific training.
And I'm going to break down how do you identify the acquirers,
reach out to them, get introductions, have
those conversations.
This is all covered below in the Fundraising Like a Pro
training.
Click the link to watch that.
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And let me know what you like the best from this video.
I appreciate you for being here.
As per usual, I want to challenge you to live a bigger
life and a bigger business.
And I'll see you next Monday.
Just like, get that bag.
I'm like what, bag?
Oh, money bag.