How do companies find acquirers for their businesses?
Takeaway: Finding the right acquirer is an active, strategic process, not a passive hope; it is driven by building relationships with strategic partners and, when the time is right, by hiring an investment banker to run a formal sale process.
For many founders, the idea of being acquired is a distant, almost magical event. They imagine that if they build a great company, a buyer like Google or Microsoft will simply show up one day with a massive offer. While this "inbound" interest does happen, it is rare. A successful M&A exit is almost always the result of a deliberate, proactive, and relationship-driven process.
You don't just wait to be bought; you actively manage the process of finding and engaging with your most logical potential acquirers. This process happens in two main phases: informal relationship building and a formal sale process.
Phase 1: Informal Relationship Building (The Long Game)
The best acquisitions are the result of long-term relationships, not cold calls. You should be building these relationships years before you are actually ready to sell.
Strategic Partnerships: The most natural path to an acquisition is through a deep commercial partnership. As you work closely with a large corporate partner, they get an inside look at your team, your technology, and your culture. They see the value you create firsthand. This transforms them from a simple customer into your most logical and enthusiastic future acquirer.
Corporate Development and CVCs: The corporate development and corporate venture capital (CVC) teams at large companies are their "eyes and ears" in the startup market. Their job is to build relationships with promising young companies. You should proactively identify and build relationships with the corp dev teams at your most likely acquirers. Keep them updated on your progress with a regular, informal update email.
Your Board and Investors: Your venture capital investors have a deep network of contacts within the C-suite of major corporations. They are a primary source of warm introductions to the key decision-makers who can champion an acquisition.
Phase 2: The Formal Sale Process (Hiring an Investment Banker)
When your board makes the formal decision that it is the right time to actively seek an exit, you may hire a professional to run the sale process for you. This is the role of an investment banker.
What an Investment Banker Does: An investment banker is a specialized M&A advisor. Their job is to:
Prepare the Company for Sale: They work with you to prepare a detailed financial model and a "Confidential Information Memorandum" (CIM), which is a comprehensive document that serves as the "pitch deck" for the acquisition.
Run a Competitive Process: They will identify and discretely contact a curated list of the most likely strategic buyers. Their goal is to create a competitive auction, bringing multiple potential buyers to the table to drive up the purchase price.
Manage the Negotiation and Closing: They are expert negotiators who will manage the entire process, from soliciting initial offers and letters of intent (LOIs) to helping you navigate the final due diligence and closing of the deal.
While it is possible to be acquired through an unsolicited inbound offer, the highest-value exits are almost always the result of a well-managed, competitive process run by an experienced investment banker. The proactive relationship building you do in the years leading up to this process is what creates the fertile ground for that competitive dynamic to succeed.
Disclaimer: This post is for general informational purposes only and does not constitute legal, tax, or financial advice. Reading or relying on this content does not create an attorney–client relationship. Every startup’s situation is unique, and you should consult qualified legal or tax professionals before making decisions that may affect your business.