On this episode of Startup Slingshot Radio I chat with Gordon Daugherty. Gordon is an advisor, investor, and Managing Director at Capital Factory in Austin, Texas. In our time together, we chat about startup M&A and cover everything from how the acquisition process goes down to how founders screw it up. The insight Gordon shares in this episode is sure to help you get your startup acquired. Enjoy!
Have comments, questions, ideas, or feedback? I want to hear it. Tweet me at william_griggs.
Topics Covered In This Episode
- Can you share some of your M&A experience to date and why you are passionate about getting this knowledge out to founders?
- Can you give us the nitty gritty of a deal that went down as a case study, of sorts, for the founders listening to this?
- When asked, “What is your exit strategy?” by an investor, what do you advise founders to say?
- Are You Selling Your Company or is Someone Buying It?
- What impact does this have on how you make decisions?
- What impact does this have on your negotiation power?
- What are some of the reasons why someone would buy your company?
- What are some of the reasons why you would want to sell your company?
- Before we dig into the details, can you give our audience the overview of how an acquisition typically goes down?
- How should they think about how much information they should reveal before they get an acquisition LOI?
- What is an LOI?
- What does it include?
- How do you suggest founders in our audience navigate this process?
- What are some things founders should be thinking about as they are going through the process?
- Who should they involve in the process?
- How long does it typically take to close a deal?
- Before the founders in our audience go down the path of securing a Letter of Intent to sell their company/having it purchased, let’s talk about a few of the issues that can kill a deal.
- What are the four?
- Intellectual Property Ownership
- Open Source
- Customer Contracts
- Patent Violations
- Financial Accounting
Gordon Daugherty’s Bio
After spending the first ten years of his career in brand name companies like IBM and Compaq, Gordon progressively gravitated towards early stage and high growth companies. He spent eight years in the videoconferencing industry, including four years as President of an Israeli-based company that grew from $5M to $36M in a short few years and went public on the Euronext stock market.
Gordon has served in an executive capacity over most company functions, but with emphasis on marketing, sales, business development and M&A. He ran corporate development and strategy for Austin-based NetQoS, who grew rapidly to more than $55M in revenue before being acquired by CA Technologies for $200M and was a founding advisor for digital advertising pioneer MediaMind, who reached $65M in revenue and a NASDAQ IPO in 2010 at a $192M valuation. Through his advisory practice, Shockwave Innovations, and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon is an active angel investor, VC and startup advisor.
Gordon is currently a board member for Austin-based technology companies SwimTopia, Riskpulse and Chiron Health. He received his Computer Science degree from Baylor University and now having raised three daughters he enjoys competitive swimming and spending time with his wife at their Galveston Island beach house or some global destination they’ve never been before.