A key component to successfully selling your company is forming a strong M&A team, composed of internal and external members with the expertise and experience needed to guide the transaction to a successful close. Here’s how to form your M&A team, identify when to hire outside help, and determine what to share with people inside the organization during the sale process.
Internal stakeholders you’ll need during the sale
To manage the intricacies of selling a software company, you’ll need a cross-functional M&A team that represents different areas of the business and helps manage the transaction from various angles. The essential members of your team will include:
- CEO/Founder: As the person leading the company, the CEO or founder will play a crucial role in the M&A process. They will often serve as the primary point of contact for buyers, represent the company in negotiations, and work closely with legal and financial advisors.
- CFO/Finance Lead: The CFO (or equivalent) is critical to managing the financial aspect of the sale. They will oversee financial due diligence, prepare financial documents, and ensure all accounting is accurate and up to date.
- CTO/Technical Lead: Selling a software company means the technical side of the business will be closely examined. The CTO or another senior technical leader will be essential for discussing the company’s technology stack, product architecture, scalability, and technical roadmap with potential buyers.
- Legal Counsel: Whether internal or external, legal representation is crucial. Legal counsel will handle drafting and reviewing contracts, intellectual property rights, employment agreements, compliance issues, and more.
- Operations/HR Lead: The operations team, particularly HR, will need to manage employee-related aspects of the transaction. From handling communications about the potential sale to assisting with transition plans and employee contracts, they play an important role in maintaining business continuity and staff morale during the sale process.
External resources to consider
While the core of your M&A team will consist of internal leaders, you will almost certainly need to hire outside experts to supplement your team. Selling a company involves highly specialized knowledge, and your internal team may not have the full range of expertise needed to navigate the process. Consider hiring the following external advisors:
- M&A Advisor/Investment Banker: An experienced M&A advisor or investment banker can be invaluable in preparing your company for sale. They will help you assess the company’s value, identify potential buyers, negotiate terms, and guide you through each step of the process.
- External Legal Counsel: Even if you have in-house legal staff, it’s usually wise to hire M&A specialists from an external law firm. M&A transactions involve complex legal agreements that require lawyers with deep experience in handling corporate sales, structuring deals, and ensuring compliance.
- Tax Advisor: Tax planning is critical when selling a company, as it can significantly impact the net proceeds of the deal. An external tax advisor who specializes in mergers and acquisitions will help you navigate tax implications and structure the transaction to minimize tax liabilities.
- Due Diligence Consultants: Buyers will conduct extensive due diligence to assess your company’s financial, legal, and operational health. Hiring consultants to conduct a pre-sale due diligence audit can help you identify and resolve any red flags before buyers do, potentially increasing your value and streamlining the sale process.
