Is it core to what you do or where your business needs to go?

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Here’s a real-life example. VerticalResponse is known for email marketing services, even though we’ve got pretty incredible online surveys and event marketing services, too. Why? Mostly because we’d just launched our event marketing tool, and our online surveys have been around for just four of our 11 years in business. Then started to talk to companies in the social media uae whatsapp number database space, because many of our small business customers were using social media in their marketing.

We started having discussions with a company called Roost, a social media marketing technology platform for small businesses. At first, we approached the relationship as a partnership because we thought both companies could really benefit. As the conversations furthered, both sides realized that an acquisition of Roost could really give us, VerticalResponse, a competitive edge in our industry from a product, customer, people and valuation perspective. What could be a better acquisition candidate? It was clear to us that diving into social media wasn’t really a “nice to have,” it had turned into a requirement. So we welcomed the Roost team aboard, launched a very nice email-and-social integration, VR Social, and it’s working – quite nicely, I might add.

If the company you’re thinking of working with has a product or service that’s a “nice to have” for your own business, you may want to start out with a partnership first, and prove it successful before you jump in.

3. Will it make you more valuable?
What makes a company valuable? Many years ago, a company was looking to acquire us because of our domain expertise in delivering email to inboxes. But we had so much more than that. We had tens of thousands of customers, pretty cool technology, great people and revenue that was climbing. They were only interested in the fact that we could send email. They wanted a “feature,” not a company, and in the end it wouldn’t have really added value to their bottom line.

So I walked away. Why? Because I wouldn’t have gotten the value for everything we worked so hard for, and our investors wouldn’t have been rewarded the way they deserved to be.

The lesson here? If you’re thinking of an acquisition, make sure you want to acquire a company for all the right reasons, and that all of those reasons add value to what you’ve already got.

When I was faced with whether to partner or acquire, these three questions led to many conversations and pretty tough company-changing decisions, hopefully for the best. I’d love to hear any questions you think I’m leaving out!