How To Increase Your Chances Of Getting Acquired By Amazon Or Walmart

a high of 363 to only 128 last year. This is the lowest number of IPOs since the financial crisis.

One reason for companies’ changing interest is that getting acquired by either Walmart or Amazon can provide startup owners financial stability, reduced risk and exposure — not to mention, a guaranteed market for the products they’ve invested in since the company’s founding. Another is that both companies are on noticeable buying sprees, and they’re looking at emerging companies in ways they haven’t in the past.

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I spoke to Richard Kestenbaum, a friend of mine and partner at Triangle Capital — a firm that specializes in a wide range of mergers, acquisitions and corporate finance transactions — about how these particular companies approach the rapidly changing business landscape by becoming more daring and open in their acquisitions. As he pointed out, they realize that not all of the companies they acquire will succeed, but they have demonstrated that being bold in the face of uncertainty is a surefire way to secure a foothold in a complex, volatile future.

This presents an entirely new way of thinking for emerging companies. IPOs are highly regulated with well-defined rules; they essentially come with a playbook for success. The rules for getting the attention of the likes of a Walmart or Amazon, on the other hand ... Not so much.

So having led many clients of mine to transactions between $300 and $500 million, I’ve decided to come up with a list that will save startups a lot of time and heartache on the hit-and-miss monitoring and positioning mistakes they often make — and increase their chances of being noticed by companies like these two retail leaders.

Build a solid, scalable product.

Many startup founders build their technology or innovation with an acquisition in mind. The danger in this is that their products are never subjected to real-life applications or used by end users in the actual context. This makes it difficult to make claims about scalability or market demand. This is not an impossible route to take — especially if the product is a one-trick widget — but it’s a rough road to go down for companies looking to get the attention of Walmart or Amazon. These companies are often willing to provide operational infrastructure, but they’re going to need to know that the product fundamentally works and can scale to meet their bandwidth.

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Had you asked any startup founder what their exit strategy was just a few years ago, most would have shared their dreams of taking their companies public. But recently, this dream has shifted, and getting on the radar of companies like Amazon and/or Walmart has taken precedence over the IPO route.

This shift is evident in the numbers: IPOs declined by 65% in the U.S. from 2014 to 2016, with a high of 363 to only 128 last year. This is the lowest number of IPOs since the financial crisis.

One reason for companies’ changing interest is that getting acquired by either Walmart or Amazon can provide startup owners financial stability, reduced risk and exposure — not to mention, a guaranteed market for the products they’ve invested in since the company’s founding. Another is that both companies are on noticeable buying sprees, and they’re looking at emerging companies in ways they haven’t in the past.

Shutterstock

I spoke to Richard Kestenbaum, a friend of mine and partner at Triangle Capital — a firm that specializes in a wide range of mergers, acquisitions and corporate finance transactions — about how these particular companies approach the rapidly changing business landscape by becoming more daring and open in their acquisitions. As he pointed out, they realize that not all of the companies they acquire will succeed, but they have demonstrated that being bold in the face of uncertainty is a surefire way to secure a foothold in a complex, volatile future.

This presents an entirely new way of thinking for emerging companies. IPOs are highly regulated with well-defined rules; they essentially come with a playbook for success. The rules for getting the attention of the likes of a Walmart or Amazon, on the other hand ... Not so much.

So having led many clients of mine to transactions between $300 and $500 million, I’ve decided to come up with a list that will save startups a lot of time and heartache on the hit-and-miss monitoring and positioning mistakes they often make — and increase their chances of being noticed by companies like these two retail leaders.

Build a solid, scalable product.

Many startup founders build their technology or innovation with an acquisition in mind. The danger in this is that their products are never subjected to real-life applications or used by end users in the actual context. This makes it difficult to make claims about scalability or market demand. This is not an impossible route to take — especially if the product is a one-trick widget — but it’s a rough road to go down for companies looking to get the attention of Walmart or Amazon. These companies are often willing to provide operational infrastructure, but they’re going to need to know that the product fundamentally works and can scale to meet their bandwidth.

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Read Again https://www.forbes.com/sites/forbesnycouncil/2017/12/28/how-to-increase-your-chances-of-getting-acquired-by-amazon-or-walmart/

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