Your Acquisition Signature

I was speaking with a Product Manager at a large tech company today. He’s looking for small, local development teams he can plug into his existing projects/teams. In talking about potential acquisitions, he described what he called the acquisition “signature.”

The term signature is an excellent way to characterize how to think about acquisitions, if you are considering being bought.

While a startup, in its early days, is trying a hundred mini-experiments to see what works and what doesn’t, big companies have multi-year plans they’re executing on. They have annual planning and budgeting sessions that require lengthy preparation, lots of slide decks, and no end of meetings.

One big company exec once said to me, “year end is a terrible time at [his company], the budgeting spreadsheets are flying everywhere!” But the planning, budgeting, and roadmapping exercises also give big company execs excellent visibility into what they want to acquire.

The characteristics of a potential acquisition can be summed up as the “signature.” The signature defines the key characteristics the company is looking to purchase: a team, a technology, or revenue.

Revenue acquisitions are a non-organic way for a big company to increase revenue. The company needs to augment the growth it’s getting through its own marketing and sales efforts. One way to do that is to buy revenue through an acquisition.

Technology acquisitions provide big companies with key intellectual property or technology that they can’t build or that they need to build faster than they are. Perhaps a competitor is beating them on a particular feature and they need that feature fast to stay competitive.

Finally, team acquisitions provide a way to hire a fully built out team without having to recruit the individuals one at a time.

Regardless of which one you are, figure out what signature your buyers are looking for and you’ll have a much easier time making your sale–and getting the price you want.