5 tips for tech leaders heading towards an exit

Thanks to Simon Moynagh, Partner at ICON, for this guest blog on how tech leaders should prep for an exit.

For a tech founder embarking on the challenge of a lifetime – selling your business – the weight of an M&A process can feel somewhat overwhelming. With so much at stake and tensions running high, leaders in this position often find themselves in unchartered territory and need to rely on a solid strategy and well-established processes to enable smooth sailing in the approach to exit.

Having closed more than 250 deals, tech-focused investment bank ICON Corporate Finance has supported many founders on this journey. Here, Partner at ICON Simon Moynagh shares his tips for tech leaders heading towards an exit.

Investors and buyers will want to see evidence that the person in charge has harnessed the marriage of macro-level strategic thinking with being on top of the essential detail of what is going on in the company day-to-day. Maintaining a big-picture focus is crucial to long-term success – but so is thorough knowledge of KPIs and up-to-date insights on how the business operates. It can be tempting as a leader to get too sucked into the nitty gritty, particularly as you hit unforeseen obstacles with the business in the near-term; but be wary as this can hinder the progression and achievement of longer-term goals.

Nailing the function of management roles is vital – and must include a genuine devolution of power to free up your time appropriately. There is more to delegation than just ticking off items on a long to-do list. Hire the right people for the job, set clear objectives, and empower and incentivize your team to hit them. Letting go can be difficult, but embracing the shift to delegate operations management and decision-making to a trusted team is part of a natural and necessary transition when your company reaches a certain size.

Any prospective buyer will want to know that when they acquire your company, the sales and other core processes don’t hinge on one or two people whose departure could leave the business exposed. There must be a proven methodology in place. This applies to customer-facing business operations such as sales and delivery but also to finance, admin and R&D functions. Implementing repeatable processes that can be scaled is a true leadership qualification and a core differentiator for an efficient and well-run business. It can also be a helpful catalyst for providing timely and accurate information when responding to due diligence requests.  

Tech leaders will be no strangers to the importance of a central vision for their business. However, the real value lies beyond some snappy wording buried in a brand deck. Founders should not only be able to articulate their vision clearly, concisely and compellingly – but also demonstrate a track record of successfully executing against the various milestones that turn the vision into reality. The team must be aligned in understanding the precise deliverables required for the organisation to achieve what is needed to fulfil the vision, and very clear on what success looks like.

An exit is clearly a very significant event in one’s life and needs thorough planning and 

professional execution to ensure that you get the best possible deal. You wouldn’t sell your business to someone who just knocked on your door; you need to market it properly, create a competitive environment and manage the process to make the most from the sale.

Seeking advice from an adviser in your sector who has trodden the path many times before is critical. Working with an M&A expert elevates the outcome of the sale by injecting the right competitive momentum in the exit.

Taking away the heavy lifting of the process preparation and execution will also allow the management team to stay on track in running the business and hitting their targets – crucial when appealing to potential acquirers. With so many moving parts to consider at crunch time, a successful leader can benefit tremendously from having an adviser with a track record that can bring to bear the full weight of their experience on how to maximise the valuation.

For further leadership advice on the exit process, visit ICON’s website or contact Simon at simon@iconcorpfin.com