Conducting M&A Without A Dedicated Team

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How effective would an M&A process be without a dedicated team? Often, people are distracted by their day jobs and very susceptible to burnout. This is why serial acquirers tend to have dedicated M&A teams in their organizations. However, Alexi Venneri, Founder, and CEO of Digital Air Strike, conducts frequent M&A deals without a dedicated team. According to her, it might be better. Continue reading as Alexi shares her experience and processes through the entire lifecycle of the deal.?

“Life is too short to work with people you don’t like or aren’t as open as I’d like them to be.” - Alexi Venneri

Better Ownership

For a company that runs transactions without a dedicated team, Alexi finds that it tends to have better ownership. As previously part of an internal M&A team, she has witnessed firsthand a deal team's lack of attachment to the transaction. Instead, the deal team usually focuses on closing the deal and hands it off to another team while looking for their next venture.?

In Digital Air Strike, without a dedicated team, they tend to be more attached to the deal and have a vested interest to see it through to the end. Also, they don’t like to engage in a new deal immediately after a deal closes. Instead, they want to execute well and ensure that the previous acquisition is completely done before they consider doing another one.??

Preliminary Diligence

Their process starts with their CFO. If there is any process with NDA, it goes straight to their CFO. His job is to check for any anomaly or anything weird in the financials of the target company.?

The next step is for the COO or head of product strategy to assess the target company’s product. Then, they use social media and press releases to track the target for updates and look for any red flags.

If everything goes well, they assess anything complimentary about the target that could make them more appealing.?

Putting an Offer

Before they put on an offer for any transaction, Alexi makes sure that she talks to the founder or CEO one-on-one. She focuses on the people and the target company’s culture. It is imperative for her to like the people she’s working alongside.?

Also, they tend to offer equity as part of their offer. She is very transparent early on because she doesn’t like reaching an LOI and spending months and months on due diligence before finding out that they aren’t compatible with the target company.

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Learn how to successfully execute a divestiture without using a bank from Russ Hartz, Vice President of Corporate Development at Ansys.

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Confirmatory Diligence

When it comes to confirmatory diligence, they divide and conquer. Alexi’s executive team knows what they should be looking for because they have excellent team alignment. As the CEO, she acts as the air traffic controller looking at the deal from the very top level and only steps in when her team detects red flags.?

They’ll set up the data room and ask the target CEO to sign off on documents. They have a pretty standard checklist of questions for every deal.?

Team Alignment and Integration?

For their strong team alignment, it is attributed to the core value of their organization; think like an owner. All of their employees have stock options, which means the more the company grows, the more money they will be making. They do quarterly meetings with new employees to discuss this matter to ensure that they completely understand what their stock options mean. This is what ultimately drives everyone else to make the acquisition much more successful.?

Their excellent alignment also drives their integration. While the executive team thinks of integration as early as preliminary diligence, everyone is excited to do the actual integration. Everyone looks forward to integrating the company and make their organization bigger and more successful. This kind of approach and mentality has been their key to success.?

Communication

Being very transparent from the get-go, Alexi approaches customers the same way. Before closing the deal, they prepare communications and plan to approach the largest customers first. Then, within 24 hours of closing the deal, they make sure to fly out to meet that customer.?

Next, they do press releases and talk to the media to let other companies know that the deal has been done.?

Conclusion

You do not need to have a dedicated M&A team to execute successful deals. Not having a dedicated M&A team has its pros and cons, but what’s even more important is how it works for your company. Air Strike is happy with its M&A process and is not seeking to build an M&A team anytime soon.

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