Published on August 31, 2023
Michia Rohrssen helped start a software-as-a-service (SaaS) company called Prodigy in 2015 to help car shops sell online. When he had to make a hard choice, the company was making $3.3 million a year in sales.
Rohrssen thought he could sell Prodigy for about 4–6 times sales, but after paying off his investors, there wouldn't be much left for the company's founders. Then he chose to change his business plan in a risky way. The change caused Prodigy's income to drop in the short term, but it also made the company more appealing to strategic buyers. Rohrssen and his co-founder eventually sold the smaller version of their company for an amazing $110 million, which is about 65 times sales. In his first interview since he told everyone about the amazing deal, Rohrssen talks about how to:
- Make your business as appealing as possible to a smart acquirer.
- Don't make the mistake that cost Rohrssen $4 million.
- Use an interesting tool to narrow down the list of strategic acquirers.
- Get an offer to buy your business that is higher than the standard valuation multiple for your market.
- Set up a "Manhattan Project" in your business.
- With a special meeting strategy, you can speed up the due diligence process.
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