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Building Trust: How Transparency Ensures Sellers a Successful Acquisition Process

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Author: Costa Tagalakis, Investment Partner

Having led numerous successful acquisitions, I’ve witnessed the significant role transparency and communication play when it comes to selling your business. Handled properly, these dynamics help ensure you find the right home for your company and that both buyer and seller walk away happy.

Before selling your business, it’s important that you understand what is most important to you and that you look for a partner who will help you achieve this. For example, are you looking to sell and move on to a new project or phase of life or are you selling because you want to focus on sales or development, but need a partner who can handle the growing administrative burden that seems to occupy your time? Knowing and communicating what you want will ensure you and the buyer are on the same page and can plan accordingly. Valsoft can accommodate a range of scenarios, but only if we know what is important to you!

With the understanding that transparency begins with clarity of purpose means you can then work towards open and candid discussions with the leadership team. Both parties must articulate their vision, aligning with strategic goals.

Transparent communication goes beyond intentions; it involves a comprehensive exchange of information. In software acquisitions, prioritizing due diligence on intellectual property, technical architecture, and client relationships builds trust and facilitates integration. You can’t sugarcoat things either; a diligent buyer will ultimately identify challenges or risks sooner or later. It’s best to portray the business accurately, all its strengths and weaknesses, from the beginning to avoid surprises. The right buyer will still cherish the opportunity at hand.

As the acquisition progresses, greater emphasis is placed on involving key stakeholders from both organizations. Transparent communication becomes a bridge connecting the cultures, values, and expectations of the acquiring and acquired companies. Regular open forums for employees to express thoughts and concerns are crucial for this approach. We’re never a fan of blindsiding or shocking the management team or employee base by only announcing the acquisition post-closing. We believe that it can be positive and constructive to prepare them to expect a sale, and bring key employees and managers into the discussions so they can gain comfort and trust with the acquirer.

Finally, transparency extends beyond the acquisition, permeating the post-merger landscape. You must continue to communicate openly about the challenges and successes to reinforce a culture of shared responsibility. This commitment to transparency facilitates a smooth transition, minimizing disruptions and maximizing the merged entity’s potential.

In conclusion, acquisition success hinges on the delicate balance of transparency and communication. Clear vision, open stakeholder communication, and seamless information flow between acquiring and acquired entities weaves transparency into the acquisition process, setting a precedent for future endeavors.

About author:

Costa Tagalakis, Investment Partner

Costa is a seasoned investment professional who is passionate about working with entrepreneurs and business owners. At Valsoft, he uses his experience and skills to evaluate potential M&A targets, conduct due diligence, and structure deals that provide a winning outcome for the selling shareholders and Valsoft. Throughout his career he has built a reputation for delivering results, including growing and operating a $50M P&L, as well as, contributing towards nearly a quarter of Valsoft’s acquisitions.  

With a dedication to excellence and a passion for investment, Costa has taught CFA Program courses, and has authored numerous articles on the finance industry for both in-house and external publications. 

Costa holds a Bachelors Degree in Finance and Accounting from Concordia University, an MBA from McGill University, and is a CFA charter holder. 

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