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S E T R E A L I S T I C P O S T - M E R G E R G O A L S
Before sitting down for negotiations, a software company needs to be very clear on what it, as a seller, wants to get out of the acquisition—and how best to achieve those goals.
based on performance can be very hard to calculate once you are subsumed into the broader organisation, as can renegotiating goals, KPIs, and targets. Making sure these aspects are addressed during a negotiation process is the first step to avoiding later complications and disappointments. However, the current uncertainty dogging world markets and financial projections may make it difficult to calculate realistic goals and targets accurately. Setting parameters and possibly implementing plans to revisit and adjust targets periodically post-acquisition may help lower uncertainty and reach an agreement that is acceptable for both parties.
areas is to identify anddetail expectations andobjectives for your services and products post-merger. Pricing and KPI targets, as well as how to measure them, should be agreed upon during negotiations. While it may sound relatively straightforward, the exact nature of selling products and services within a larger organization is something that will take some getting used to for tech companies. Without attention to detail, the pricing of your company’s services and solutions within the organization can become very opaque. Lack of clarity surrounding measurement of things like costs, sales, and performance will, in turn, affect your ability to reach your targets—including your potential earnout target. Setting clear goals for an earnout
Are you entering a deal that can take the company to the next level? Are you selling to cash in on all your hard work and get an earnout? Or do you want to start a new business venture? These relatively simple questions introduce variables to M&A negotiations. What is the timeframe for reaching the next level, for example? What defines the next level? How long of an earnout are you willing to accept? These are just a few initial questions that need answers. Otherwise, both you and your company risk a deal negotiation that will be more difficult and time-consuming than necessary. During the negotiation process, it is essential to clearly outline what your roles, responsibilities, core offerings, and targets will be post-acquisition. One of the critical
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