Written by: Tom C. Schapira, Executive Vice President
Running a Competitive M&A and Growth Capital Process: When and Why It Matters
Deciding to pursue an M&A or growth capital process is a significant milestone. But once you’ve made that decision, the next question is: How do you approach it? Do you prefer discreet, one-on-one negotiations with a select investor or buyer? Or do you want to cast a wider net and maximize value through a competitive process?
The answer depends on your priorities—but if maximizing valuation is your goal, running a competitive process may be your best option.
When Is It Time to Consider an M&A or Growth Capital Process?
There are several triggers that signal it might be the right time. Maybe market conditions are peaking in your sector, and it’s the perfect moment to capitalize on favorable valuations and cash in your chips. Perhaps you’re experiencing rapid growth and want to fuel that momentum with strategic partnerships, acquisitions, or external capital. Sometimes, it’s as simple as aligning with investor or founder goals—whether for liquidity, scaling, or shifting business priorities. And in some cases, competitive pressures mean acting now to maintain or strengthen your market position.
Once you’re at this crossroads, deciding on the right process can define your outcome.
Discreet Negotiations vs. Competitive Processes
During my London meetings, I met with several founders who wondered if they should run a process or simply have confidential negotiations with just a few parties.
Discretion is ideal for those prioritizing confidentiality or with a specific strategic buyer or investor already in mind. But there’s a trade-off. 1:1 negotiations are sometimes slower. You’re building a relationship, but without other offers on the table, you have nothing to compare. If the deal falls through, you’re back to square one, repeating the process with another party.
That said, 1:1 processes can be prudent in highly competitive industries where customer retention is fragile, or where broadcasting your intent to raise capital or sell could destabilize relationships. In these cases, discretion isn’t just a preference—it’s a necessity.
On the other hand, running a competitive process is designed to maximize valuation and terms—whether you’re raising capital or considering an exit. It’s like hosting an open house when selling your home. Do you want just 1-2 buyers visiting quietly, or would you prefer a packed open house, driving multiple offers and higher bids? The latter creates a sense of urgency and scarcity, giving you the leverage to negotiate the best deal.
Why a Competitive Process Maximizes Value
A competitive process isn’t just about attracting more offers—it’s about creating leverage and momentum. When investors or buyers know they’re competing, they’re more likely to offer favorable terms beyond just price. It also accelerates timelines, pushing interested parties to move quickly. And perhaps most importantly, it strengthens your negotiating position. You have the flexibility to walk away from less attractive offers, knowing others are on the table.
It’s not just about numbers, though. A well-run process can uncover strategic partners you hadn’t considered—those who see unique synergies and are willing to pay a premium for them.
I hope you found these perspectives helpful. Let’s discuss your strategy for M&A or to raise capital without compromising your future.
