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4 Steps to Relationship Building in M&A

Typically, business development professionals are trying to sell a product or service.

Business development in M&A is different. In M&A, you are offering a service, the service of acquiring or assisting in the acquisition of your clients business. While you might expect this means the typical sales process is entirely different to one of an enterprise sales organization – they tend to be similar.

Over my five years at Volaris, I’ve made thousands of outreach attempts, attended numerous tradeshows around the world, and managed to originate various opportunities. Here’s what I’ve learned:

Step 1. Know Your Target Market

Know your target market and maybe, more importantly, know what it isn’t. While many of us may be open to deals in a variety of sectors, without some level of market focus you will not find the opportunities you are looking for. You will continue to cast too wide of a net. By knowing what you are looking for, you can also develop domain expertise and deep industry relationships. A master of all can tend to be a master of none.

The most innovative businesses and their owners want to see you understand them. They feel if you understand them and their business, that will mean a higher valuation as you realize the potential of the business. Having domain expertise and putting your executives with industry experience in front of these prospects is key within the process.    

You should also develop and understand ‘seller personas.’ Owner-operators have different motivations than private equity funds and you should present to these stakeholders differently.

Step 2. Where to Find Your Targets  

Now that you know what to look for, where do you find them?

You can start with the tools of many other sales teams - Capterra, Google, LinkedIn.

We like to take it a step deeper and look at industry-relevant trade show exhibitor lists and attend shows (most recently, our Portfolio Leader Mats Ekelund attended FiberConnect), read industry magazines and newsletters as well as subscribing to proprietary databases of software companies.     

Get to know your ecosystem. When you’re on the phone with a prospect, ask about their competitors or where they’ve previously worked to learn more about the businesses within the space. 

Developing a strong relationship with intermediaries and advisors is incredibly important. We find the intermediaries are a key source of opportunities and we try to maintain contact whenever possible. (Reach out if you would like to chat!).

Step 3. Do the Research

Now that you have found appropriate opportunities, it’s time to research.

One thing to consider is the stage of the business in its lifecycle today. Try to understand when the business was founded, if they had recently received funding, their growth trajectory, and any other idea that can give you a tip around what stage of business they are in. This will inform how you present potential strategies for growth.

Another idea to consider is the stage of the journey for the ownership/management team. Perhaps they have been running this business for a long while, and fatigue is starting to set in. You could also imagine a founder/owner of 25 years may be ready for retirement.

Step. 4: Tailor Your Approach, and Keep in Touch!

As referenced above it is important to personalize your approach based on a variety of factors. That first email or call you make to a prospect is where you are going to hook them – and this needs to be a thoughtful approach. I frequently see people getting responses like “this looks like a mass email” or “go fish somewhere else”.

Once you do develop a new relationship – keep in touch! Businesses are not sold often, and if you are not organized about follow up and maintaining contact I can 100% guarantee you will miss the opportunity.

The learning never stops in M&A and I look forward to hearing from you. If you have any questions about Volaris Group, please reach out!     

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Elliot Yunger

Elliot Yunger serves as the Director of Business Development of the Communications & Media Portfolio. Before joining Volaris Group, Elliot worked for Cyhawk Ventures, a Tel Aviv based Venture Capital firm in sales organization for multiple businesses. Once returning to Toronto, he joined up with the Volaris Group to help accelerate growth across multiple verticals before specializing within the Communications & Media portfolio. Elliot has helped to lead multiple acquisitions and integrations for Volaris Group and has worked in Singapore, India and Tel Aviv.