The process required to sell your startup is like a second job. But you don’t need to be too aggressive about it—instead of forcefully networking with the hopes of a quick sale, Austin Johnsen, Zapier’s Head of Corporate Development, said to take a lighter-touch approach. Speaking with TechExit.io, Austin explained more about his tips for M&A success as a founder looking to sell.
Key takeaways:
- It can take years to build a relationship that ends in a successful sale.
- Keep in touch with low-commitment things like adding corp dev people to your regular investor updates or founder newsletter.
- It might be easier to get acquired if you can first get the company as a customer, investor, or partner.
Like many large tech companies, workflow automation platform Zapier is no stranger to acquisitions and regularly uses M&A as a way to both accelerate their roadmap and bring on great talent.
And if you’re looking to potentially exit, Zapier may be a great fit—if you approach it right.
Speaking with TechExit.io, Austin Johnsen, Zapier’s Head of Corporate Development, explained what it takes to do a deal with the software giant.
1. Build relationships, don’t pitch a sale
So you want to sell your company? Great—that can (and should) inform how you build it.
But that doesn’t mean you can rush into it. Instead, you have to build relationships more slowly over time.
“Usually, if I get a cold outreach and you’re like, ‘Hey, my company’s for sale. I need to make a decision in the next couple weeks. Are you interested?’ We’re going to pass,” said Austin.
Specifically, Austin wants founders to know that selling to Zapier—or any strategic acquirer—is not simply a matter of strategy-fit; timing plays a huge role.
“Lots of companies make a ton of strategic sense,” said Austin. “But if it’s just not a priority at that time, we’re going to pass or we’re going to table it. I think that’s one of the things sometimes founders struggle to fully appreciate.”
2. Stay in touch and be flexible
Founders shouldn’t waste too much time networking—after all, you have a business to run. Austin’s advice is to think of multiple light-touch ways to keep connected:
- Introduce yourself: Austin said, for instance, he can usually make time within a couple of weeks for an intro chat.
- DIY efforts: Read the news and set a Google Alert for the company, seeing how company evolution might impact whether your company is a fit for acquisition.
- Digital connection: Add corp dev team members to your investor updates or founder newsletter, whether that’s monthly or quarterly—just ask first!
- Standing meetings: Austin added that he’d be ok with a standing meeting every 6-9 months. However, he cautioned founders to proactively cancel if they don’t have something novel to share.
“So much of this is timing and, frankly, a bit of luck,” said Austin. “You need to have a relationship in place, be patient, and have flexibility to be ready when we’re ready.”
3. Fix your yellow flags
During any relationship building or M&A due diligence, Austin said a few yellow flags can delay or kill the deal.
Your team structure
Austin said he often passes if the company is solely a non-technical founder with a team of contractors and freelancers. Similarly, this was something Aaron Gould realized as he built OneComply with an exit in mind—keeping IP and talent in-house was attractive to buyers.
Your cap table
Not seeing any professional investors on your cap table is a yellow flag, if you went down the investor route over bootstrapping. While they don’t need to be name-brand, Austin gets concerned if it’s primarily unsophisticated investors backing the company.
“Inexperienced investors can sometimes be obstacles to getting a deal done, since most deals require shareholder approval,” said Austin.
Your team’s geography
Zapier typically hires on teams from acquired companies. With that in mind, hiring in countries where visas are difficult—China, for instance—can be a difficulty from an acquisition perspective.
Austin also named one red flag: unrealistic founder expectations.
While he expects founders to have a “rosy, positive view of their company and its value,” he also expects some practicality.
“I can think of too many examples in my past of founders who killed a deal with just too high of expectations,” said Austin. “And then six months or a year later, seeing them shut down the company.”
4. Don’t go over the M&A team
If you’re talking to the M&A team and they say no or not right now, trying to go above their head won’t work.
For instance, Austin once passed on a company because it wasn’t a fit. Rather than accepting that (or waiting for another engagement opportunity), the person cold-emailed the CEO. Naturally, the CEO forwarded the deal to Austin. Once he explained his reasons for declining, that founder ended up looking even worse for having tried to go over him.
“Odds are it probably puts a bad taste in everyone’s mouth that you’re just shopping around for a different decision without necessarily adding any additional value,” said Austin.
5. A sale isn’t your only option
If you want to increase your chances of an acquisition, a direct sale may not be your best option. Instead, consider:
- Try to get Zapier as a customer of your platform.
- Pitch Zapier as a potential investor in your next round through their corporate VC fund.
- Connect with the Partnerships team about becoming a trusted partner.
“By proving your value, you end up probably becoming a more valuable company—we’re okay if we have to then pay more for you because of that, because we’ve somewhat also de-risked the acquisition,” said Austin.
Don’t put your eggs in one basket
Wanting an exit should definitely be part of your growth journey—but you can’t forget you’re also building a real business.
So if M&A conversations go nowhere right now, accept it; keep building and keep engaging with other corporate development teams. You never know what might happen—there have even been instances where Austin has acquired companies multiple years after an initial pass when the metaphorical stars aligned.
“I want to see all the things that might be a fit for Zapier and have all those meetings, but odds are we’re not doing a deal immediately,” said Austin. “But take the meetings—when Zapier is ready to do a deal, you’re top of mind and you’re on that shopping list.”
