Women In Business

From start-up to acquisition: How female tech founders can do it

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Start-up founders begin their companies with two things in mind; an idea they are ready to execute and a goal for what they envision the company evolving into. For some it is to stay private long term, but for others it is with the goal of a strategic sale to another company. The latter was my goal when I started Sprooki. Positioning my company for acquisition meant approaching strategies in ways that kept the end result in mind, and has taught me many lessons. For those entrepreneurs considering acquisition as an exit strategy, there are some areas that require your attention and consideration – no matter how early in the journey you are.

Be prepared for a long haul

It’s a rare business that you launch and are in and out of within two years. Sprooki had a three year horizon to begin with, and it ended up taking six years to journey from start to acquisition. So be sure to pick an industry or idea you are genuinely passionate about and capable or confident of funding and incubating for at least a few to several years.

A united team

Start-ups consume your time and energy much like a new born baby, with founders often wearing multiple hats within the org chart. If you have a partner, it will help if they are on board and supportive. If they are not completely on board it will be a thousand times harder for the two of you to navigate this time successfully. A partner who is understanding and supportive of the frequent late nights, long distance travel and why you have to take a call in the middle of the weekend, is essential.

Trust your instincts

If something or someone feels not quite right, chances are it isn’t and it will come back to haunt you. I recall a few examples of this with customers who the product didn’t fit quite right or investors who had different motives for investing and understanding of our business exit versus our plans and vision. If your instincts are telling you it’s not right, don’t do it.

Pivot quickly

Don’t hang on too long if your product isn’t quite getting customer adoption you had hoped or your business model is somewhat flawed. In our first year we operated a B2C model, kind of like a classified advertising business. This was not only hard work it also took a lot more capital to scale across multiple markets and we recognized quickly something had to change. We pivoted to a B2B model over a six month period running both in parallel.  While we learnt a lot through the B2C product period and were able to respond quickly to iterate the product, we ultimately didn’t have the capital to resource and scale a B2C business. So, it was the right decision to pivot and one we had to make quickly.

Find the best talent

Carefully select and construct a team who have integrity and who are passionate about the vision. Equally important, is a commitment to hire more females in technology roles. I wish there were more women in technology roles and companies, particularly in engineering/development, design and CEO roles. The commercial world is slowly adjusting to understand how women bring different thought processes and culture to the team that is highly valuable. For all staff regardless of gender, it is important to evaluate regularly how each team member contributes to the overall company. If it’s not working out with someone in your team, a quick decision to remove them or change their role is better than a slow drawn out one that will cost you and the business time.

Never run out of capital. ever.

Like many startups, there were fat times and lean times with our business. When we were able to invest in people and technology to deliver our plans, it was great! However, we had to at times make tough decisions based on cashflow like letting people go, which no one likes to do. However, if we didn’t, the business may not have had a future and the rest of the team may have had to lose their jobs too. Ultimately, a close eye on cashflow and realistic forecasts is crucial, and often founders are so excited or overwhelmed with the vision they take their eye off the ball when it comes to maintaining and managing cashflow.

Let go

As the founder there’s probably few in the business that can sell the vision or product as well as you. However just because you can do something doesn’t mean you should. One of the biggest challenges an early stage business has is moving from founder as a sales person to scalable commercialisation. Focusing your strengths into the commercialisation and utilising the strengths of your team to support the other areas of your business is an important balance that takes time to get right.

Regardless of industry, building a company from concept to scale is a long process that requires multiple iterations. However, when you are making a solid profit off a customer base that can grow and with a product or service that can scale, companies are going to start noticing and pursuing you to acquire your startup. At this stage, it is crucial to understand fully why a commercial acquisition should happen, if at all. Just make sure you are ready.

About Claire Mula

Claire Mula is the Chief Operating Officer at Invigor Group. Claire is a thought-leader, entrepreneur and expert in data and digital transformation. As Business In-sider’s “Top 100 coolest people in tech” she has experienced the disruption of sec-tors such as Media and Technology and is now helping to transform Retailer and Brands in the age of Amazon.

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