BDO LLP | PRIVATE EQUITY
02
EXTERNAL INDICATORS When you started your technology business, the chances are you seized a gap in the market and capitalised on it. You did something better or differently to everyone else. Having to constantly evolve your product in order to just stand still can be very challenging. But unless you do, the competition can catch up and erode your advantage. Where once you were an innovative force, you may now be in danger of being disrupted yourself. The challenges of evolving your product and business offering can be daunting. Disruptive newcomers may threaten not just your existing business models but also your revenue and point of difference. To compete, you may need to bring in whole new skillsets and systems and re-educate prospects. Do you have the appetite and the capabilities to take on this challenge? The pandemic increased pressure on tech businesses. Now founders need to evolve and adapt their current business processes and product offerings – not to grow but just to survive.
constantly seeking opportunities to invest in growth businesses. As a result, you may receive an unexpected and unsolicited approach from a PE house or trade investor. The figures could seem simply too good to turn down, even if you weren’t planning to sell. Time for a change: You may have reached a point where you want to do something different, like a creative endeavour, charity work or another business venture. Now may feel like the right time to pick up something you always wanted to do but had put on hold. Appetite for risk (or lack of it): The business may have reached a point where it needs significant reinvestment or re- engineering to keep growing. Can you generate the cash to fund new systems, new premises and increased staff? Coupled with your personal situation, you also need to weigh up other indicators that could argue for or against an exit from your business. These can be divided into external and internal indicators.
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