Strategic acquisitions

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There are strategic acquisitions and financial acquisitions.

Strategic acquisitions are made for factors other than financial considerations.

Here’s a list of strategic reasons buyers acquire companies:

The acquired company provides sales growth for the buyer.

Startups are often in emerging technology markets with the promise of future sales growth.

The buyer wants to roll up several companies to pursue a new market.

Collecting a group of startups into an acquisition can provide a competitive advantage.

The buyer wants to improve their competitive position.

By purchasing a startup they can build their competitive advantage.

The buyer may want to integrate vertically.

By buying their supplier, a company can build a stronger supply chain.

The buyer may want to gain access to a new market that requires a license.

By buying a company with a license, they overcome regulatory barriers.

The buyer may want to buy a company for the product it has already built.

This speeds up the buyer’s time to market.

The buyer may want to buy a startup for the team they have.

This helps the buyer obtain talent.

Consider these reasons in selling your business to a company for strategic purposes.



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