Partnering as an Exit Strategy

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Questions

Q: Interested in Who and How do you approach

potential acquirers/partners?

Q: Would such Partnerships need to be exclusive (if you’re that

potentially valuable to them)?

Q: Does this not confuse the roles with M&A Specialist

focus?

Q: How large should the potential partner/acquirer

company be?

Q: How do you get partners to resell our solution?

Q: What types of partners should seek to partner with?

Q: How do we get our partners to do more?

Q: How long should you partner before

seeking/expecting to be acquired?

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Welcome

If you have any questions, please interrupt…

Type into the Chat/Question screen

Donagh Kiernan, Founder and CEO

Tenego Partneringwww.tenegopartnering.comhttp://ie.linkedin.com/in/donaghkiernan

Donagh KiernanFounder and CEOTenego Partnering

27 years – Techie background Sales Channel, Direct Sales and ChannelSales Organisation Management.

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Tenego: Services

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Tenego Clients

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Tenego’s Methodologies

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Tenego’s Global Network

• To date, executed projects across UK & Ireland, Across Europe, North America, Mexico & Latin America, Middle East, North Africa, India, China, South Asia…

• Growing Global Network of Tenego Offices with on the ground presence and in discussion in

– Ireland (HQ), UK, Germany, Netherlands, Greece

– Middle East, APAC

– Canada, US East Coast, US West Coast …

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Partnering as an Exit Strategy

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“50% of acquisitions

have prior partnership relationships”

“Tenego’s activity increased the value of our trade sale and also accelerated the process” -Tech CEO,

(whose company was acquired by one of their partners)

Exits - Sellers and Buyers

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Buyers• “Too often company executives driven

by expanding their empire or blinded by a ‘quick fix’ for entering a new market, end up in an overpriced deal” - Inc.com

• “They completely overlooked our people when they purchased us”

• The prime reason for acquisition failure is poor culture fit.

Sellers• “If you’re building your business to sell,

then focus on building a great business. Don’t focus on selling your business”, - multiple business leaders

• “In up to 50% of trade sales, a prior partnership relationship existed between the companies” - Silicon Valley M&A Experts

• The prime reason for Partnering failure is Poor Partner Fit

Exits: Sellers and Buyers

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Buyers: Wants• Acquire at good value, while

accelerating their growth and/or adding shareholder value

• Minimise risk, in solution and company fit within their business

• enable continued growth with quick and easy integration

Buyers: Challenges• The cold evaluation/due diligence

process can only tell so much• High risks in getting it wrong.

Sellers: Wants• Exit with the optimum valuation, as

early as possible• Maximise cash payment while

minimising earn-out period• Take care of career paths for your

team, and the senior team and maybe founders too

Sellers: Challenges• Multiple risks to achieve growth and

desired valuation target• Risks in getting it wrong, fire-sale,

dying early or zombie.

What is your Exit Strategy?

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• Why will your company be bought?• How will an acquirer value in your business?

– Revenues– Value of Customers in your market region or sector – With your technology and capabilities, THEY can grow faster– …

• How to you get bought, rather than Seeking to Sell– How do you get on the radar of an acquirer?– How do you maximise your valuation?

• Be Careful– Chasing the wrong valuation metric– Chasing a finish line with an exit in mind

– Seeking to sell without being ready may devalue your business.

Consider your Exit Strategy?

• Lead your own Vision, not someone else’s

– Risks in determining why you will be bought– Risks in pre-selecting potential acquirers– Are they on the right path?

• Build a Great Business while building shareholder value

– Grow to last – to forever grow– While always being corporately ready

• Lead the market – Influence the market

– Create your own market (as you define it)– Make them follow you– Be acquired for your leadership in the market.

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Build a Great Business & Shareholder Value

• Execute well – Build your Growth Engine by delivering growth– Build your International marketing, sales and delivery orgs– Build a clear strong sales engine with multiple revenue streams – Continually address the scalability challenges in your business

• Learn to Partner, Learn to Grow - Strengthen Position:

– Partner across the market – Partner with competitors in different markets, sectors and regions– Partner with potential acquirers for revenue purposes, on your plan

• Demonstrate Strength, Independence and Leadership

– Do things and demonstrates your direction, your potential and add shareholder value to your business.

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How do you Partner,

with an Exit in mind?or

Do you want to actively

seek an Exit, NOW?

What types of companies are suitable?Partner Type Selection & Partner Fit

a) Capabilities you have / Capabilities you need to grow

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Product/Solution/ServicesBusiness Engine Market,

Sales & Delivery

Market EcoSystem:

Company TypesPartner Type Evaluation

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Influ

ence

rs

Consumer n/a

Policy Makers / Regulators

Standards / Certification

ISO27001, BSA, ITIL, ITAR, PII, SISA

Codes of Practice Public Sector, Local Authorities

Analysts

Media

Industry Organisations

Targ

et C

usto

mer

s Water

Electricity

Gas

Advi

sors

/Con

sulti

ng

Accountants / Tax Advisors / Business

Consulting T1

Legal*

Accountants/Business

Consulting T2*

BPO Industry Organisations

Debt

Ser

vice

s &

Colle

ctio

n

Specialist Debt Consultants / Credit

Checking *

Debt Recovery*

BPO Accounts Receivable

SI’s

& IT

Ser

vice

s IT Consulting

Systems Integrators* ,

IT Managed Services

IT Services

Softw

are

Solu

tions

Debt Management Software*

Contact Centre Mgmt Systems*

Workflow /Doc Management /Case

Management

Your Market EcosystemWhat Company Types have access to your customers and the capabilities

to help you sell?

AND / OR

Could potential buy your company?

Partner Type Evaluation / Scoring

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Leads

Plan

Create

Qualify

Develop

Prove

Negotiate

Close

Implem

ent

Support

Value A

dded Solutions

Know

ledge & Focus

Existing &

Grow

ing

Custom

er Base

Credibility / Influence w

ith

Decision M

akers

Ease of doing B

usiness

Opportunity for Partner

Time-to-E

ngagement

Partnering E

xperience

# Potential C

o's in Market

Lead Gen

Sales

Delivery

Key C

riteria

Full Process

Business/IT Consultants Regional 2 4 4 4 4 4 2 2 3 1 0 2 2 5 4 3 5 3 5

Business/IT Consultants Regional

43 41 33 29 59 2 3.0 3.9

Sales and Delvery Process Key Characteristics Summary by Capability

Sector Specific Consultants 3 5 5 5 5 5 3 3 4 1 0 6 3 6 4 4 5 4 3

Business/IT Consultants Regional

53 51 40 35 74 3

BPO 3 5 5 5 5 5 5 5 3 2 2 4 3 5 2 2 2 4 3

BPO

43 45 32 25 70 4

System Integrators (VARs) 4 5 5 5 5 5 5 5 5 5 5 5 4 5 5 5 5 5 4

System Integrators (VARs)

57 58 53 38 92 1

Sector Specific Solutions 4 5 5 5 5 5 5 5 2 2 0 5 5 5 4 4 2 4 3 51 52 36 32 75 2

Direct (current) 0 5 5 5 5 5 5 5 4 4 3 2 5 2 3 3 3 5 3 Direct (current)41 46 37 26 72

Our Partner Propositions -

enabling or providing

for the partner…

Evidence of S

trong Value

Proposition (0-6)

Opportunity for Partner

(0-6)

Opportunity for Vendor

(0-6)

The Value the Company Types bring to us

2 4 4 4 4 4 2 2 3 1 0 2 2 5 4 3 5 3 5 43 41 33 29 59Business/IT Consultants

Regional

in supporting the sale of Vendor;to provide services on business

process development, training, documentation and change

management, and licence revenue share2 3.0 3.9

introductions/referrals into deals and local expertise in consulting

services

3Sector Specific

Consultants

in supporting the sale of Vendor;to provide sector specific services on

business process development, training, documentation and change

management, and licence revenue share1 4.0 4.9

introductions/referrals into deals and local expertise in consulting

services

4 BPO

enabling BPO's to provide flexible integration and solutions to their

clients businesses and revenue stream, or credits, in introducing their

clients to the solution4 2.0 4.7

Grow Pivotal licence share on a per seat basis and int

1System Integrators

(VARs)

enabling Implementation service revenues and licence share AND a

plaform and global marketplace for sector specific solutions developed 4 5.0 6.1full lead gen, sales, implementation and support representation for

Vendor and opportunity for new solutions

2 Sector Specific Solutions

providing sector specific CRM based applications adding value to their

existing sector solutions 1 4.0 5.0introductions/referrals into deals and local expertise in consulting

services

Partner ManagementPartner RecruitmentPartner Type Selection

Step 1

DefinePartnering

Requirements

Step 2

EvaluateTarget Markets

Internal Intelligence

• Products/Services

• Proposals

• Customers

• Sales Process

• Sales Collateral

Evaluate Market

• Product Markets

• Specialist Service Markets

• Routes to Target Customers

Step 3

Select Targets&

Define Approach

Define Approach

• Analyse and Score

• Select Initial Targets

• Define Specific Business Case

Step 4

Make Approach&

Determine Fit

Make Approach

• Approach target companies, starting with Top Targets

• Determine Interest and Strategic Fit

• Review Approach

Step 5

Establish & Build Business

Relationship

Partners

• Ensure Marketing & Sales Fit

• Ensure Operational Fit

• Ensure Strong Reference Sites

Outputs

• Partnering Objectives

• Partner Value Proposition

• Sales and Delivery Capabilities Required

Outputs

• Market Eco-System & Trends

• Competitors Review

• Target Partner Types Profiles including search criteria

Outputs

• Scored Lists

• Top Targets

• Specific Business Cases

• Approach Action Plan

Outputs

• Selected Initial Partners

• Agreed Partnering Terms (Tentative)

• Identify Initial Engagements

Outputs

• Working Initial Partnerships

• Repeatable Partnering Model

• Partner Maximising Plan

Week 1 to 4 Week 5 to … On-going

Tenego’s Partnering Process

Partner / Acquirer Approach

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Decision Makers:• Head of Product / Strategy / Business Development• OR Corporate Development (are you sure?)• Depending on size

Approach:• Partner Value Proposition for revenue purposes

– Additional revenue from their existing customers– Help them win new customers– Key additional functionality or product suite module

• Acquisition Proposition– Growth Potential – Capture (own) the value they can create with your product.

Partner Management - Exit Influencing

• Understand:

– Partners' Acquisition policy and activity

– Decision Makers' motivations to acquisitions

• Determine activities in influencing decision makers

– Partner with competing companies:• Creating perception of being everywhere

– Partner/influence all layers of their EcoSystem:• Analysts, Trade Associations, Trade Media, Consultants, Service

Companies, Resellers and Solution Companies.

Next Step Actions

1) Assess your company’s/product’s Growth Potential

2) Assess the Partner Types for Revenue & Acquisition

3) Execute; Recruit Partners, Manage Partners, Drive Revenue– Structure your Partner Recruitment, Partner value Proposition and

Partner Management approach

– Build multi-level relationships across Marketing, Sales, Implementation, Support, Product, Senior Team including Corporate Development

4) Build a Great Business, spread your inter-dependence, Create Value

5) Wait or Trigger Acquisition discussions.

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Thank You & Questions

Donagh KiernanFounder & CEO

Tenego Partnering

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www.tenegopartnering.com/resource www.tenegopartnering.com/blog

Further content available online

Presentation can be found here:

https://www.slideshare.net/DonaghKiernan/partnering-as-an-exit-strategy

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Additional Webinars

• Other webinars available in our Resource Page:

• How to fix a Broken Sales Channel

• Partner Program Development for Scalable International Growth

• Planning 2017: Decisions and Tools for Growth

• Sales Partner Management for better Partner Engagement

• How to ensure Partner Fit. It's not as simple as it may seem

• Meet Your Revenue Targets with Focused Sales Execution

• Finding Big Markets for Big Data & Data Analytics Solutions

• Business in Europe: Understanding the bigger opportunities

• Growing your Business in the UK

• Germany: Opportunities for Tech Companies

• Market Opportunities in Australia for Tech Companies

• How To Prevent The Mistakes in Sales Channel Development

• And many more…

www.tenegopartnering.com/resource 25

Related Articles

• Available in our Blog:

• Want to sell your company? Then Partner with potential acquirers

• The First 100 Days of Taking Control of Your Sales Channel

• Are you Strategic to your Strategic Partner? - Software Sales Channels Unrequited Love

• 5 In & 5 Out in Reviewing & Improving Your Sales Channels - Part 2 of 2

• 5 In & 5 Out in Reviewing & Improving Your Sales Channels - Part 1 of 2

• What Partner Types do you want in your Partner Program?

• 5 Hard Things in Building an Effective Partner Program

• 5 Points on Breaking Preconceived Notions with Just Enough Analysis

• Your Sales Focus? Quarter-end Targets AND/OR Game Change Next Year?

• One Engine, many speeds: Managing Direct Sales and Partners

• 5 Partner Management Styles - Which one are you?

• Diagnose your Current Sales Channels - Partner Fit Evaluation

And many more…

www.tenegopartnering.com/blog 26

Build & Manage Sales •

Direct and Channels•

Executive Hands-on•

Your Alliances Team•

Software Business Experts

•

Practical•

Results Focussed

CONTACT DETAILS:

Tenego Partnering

Ireland (HQ), UK, Germany, Greece, Benelux,

Australia, Toronto, Dubai…

Web: www.tenegopartnering.com

Email: info@tenegopartnering.com

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