Why Now is the Time to Buy or Sell a Business

Looking for Business Opportunities Ahead of the Economic Fallout

In this difficult time of staying at home, people may be looking to buy or sell a business. We have all been impacted in different ways, each of which may be a reason to make a change. Traditional reasons people exit a company arise because of changing economic conditions, a tragic family event, a loss of passion, or simply the desire to retire. At the same time, buyers may be seeking to expand in a sector or industry, add talent, enlarge the customer base, or acquire technologies or resources that can provide a competitive advantage. Witness the unprecedented overnight shift to tele-work, tele-health, remote online primary school education, and live-streamed happy hours and family gatherings.

Thinking of Buying or Selling a Business?

If you are thinking of buying or selling a business, here are three key reasons to act now. First, labor is in flux, and available. As retailers, restaurants, travel companies and other service sectors that employ tens of millions of Americans get squeezed, the tech sector, which tends to have relatively few employees, has surged. Many target businesses may have a lower headcount while retaining a leaner operating infrastructure and access to a ready, willing, and trained talent pool.

Second, the federal government will do what it takes to stabilize the economy and accelerate the recovery. Nevertheless, there is a real risk of many “main-street” companies going bankrupt – making them easy acquisition targets. Opposite that, large-scale public companies (consumer-packaged goods, media) are boosting the broader recovery. Companies on either side of this equation may benefit from the changing market dynamics and opportunities for what comes next. As of this writing, nine states have lifted the stay-at-home orders or will let them expire, with many others soon to follow. The window is closing.

Third, one of few benefits of the current crisis is the acceleration of investment and escalation of consumer-facing products, services, and technologies. Reports indicate that 2020 shows a year-over-year (YoY) increase of over 15% in use of contactless payments.  This is a real opportunity for companies to not only “get lean” but also digitize business practices that can improve the customer experience.

Changing consumer behavior will continue to force this along. According to Forbes, U.S. YoY online retail revenue growth is up 68% in April, surpassing the earlier peak of 49% in early January. U.S. & Canadian e-commerce orders grew 129% with 146% growth in all online retail orders. Online conversion rates increased 8.8% in February, an increase of shopping intensity usually seen only during rare events such as Cyber Monday.

Bottom Line

Most people are sitting around waiting for things to shift and change around them, while others are moving through it all and pivoting on their own. Don’t wait for your competitors to invest in the next generation technologies. Working with experienced legal counsel will help you identify the opportunities and act quickly to negotiate and close a deal. If you are interested in learning more about buying or selling a business, please get in touch.

World #Tech #Startup News Roundup

Norway a Hard Place for Tech Startups
Wall Street Journal (blog)
And there are other reasons why Norway is inhospitable to tech startups, according to Lasse Andresen, the chief technology officer of ForgeRock, an online identity management company that shifted its headquarters from Norway to San Francisco last year.

South Korea to launch new stock market to support fund-raising for startups
Washington Post
SEOUL, South Korea — South Korea’s bourse operator says it is opening a new stock market to help startups raise money. Korea Exchange Vice Chairman Choi Hong-sik said Friday the July launch of the KONEX market is intended to incubate small businesses.

Galvanize, Denver Startup Week Win Plaudits from Denver’s Old Guard
Xconomy
Galvanize, the coworking space that’s quickly become the hub for Denver’s top tech startups, and Denver Startup Week both received awards from the Downtown Denver Partnership, one of Colorado’s largest economic vitality groups.

Online education startup EduKart raises $500K in seed funding
VC Circle
The startup was founded by Ishan Gupta (CEO) and Mayank Gupta (COO) (they are not related) in 2011. Ishan had earlier worked with companies like One97 Mobility Fund, Facebook, Helion Venture Partners, Quantum Hi-Tech and Appin Knowledge.

Canada Startup of the Week – Brightsquid
Calgary Herald
Lloyed Lobo covers Calgary’s tech startup community. He is a Partner at Boast Capital and the VP of Community Evangelism at Startup Calgary. If you are working on something that could potentially change the world, we’d like to hear about it.

Life in a chocolate factory versus life in a startup
Boing Boing
Elaine Wherry took a break from working in San Francisco high-tech startups to work at Dandelion Chocolate, the chocolate maker/cafe that her husband co-founded. She calls her tenure at the chocolate factory her life as “an Oompa Loompa.”

Incubator NEST Investments Wants To Help Hong Kong’s Fledgling Startup Industry
TechCrunch
Though Hong Kong is one of the world’s leading financial hubs, its startup industry is still embryonic. Incubator NEST Investments hopes to change that by helping tech companies take advantage of the region’s wealth and resources as they work toward entering the mainland Chinese market.