Ask an Investor: 7 Tips for Getting Acquired on Amazon

Raunak Nirmal
Jan 13, 2021 · 3 min read

Not every Amazon business will get acquired.

It takes a special combination of building a beloved product, developing operations to facilitate that product’s growth, and offering something to the Amazon community that puts you ahead of the rest.

At Acquco, our evaluation process includes many factors that assess whether your business is primed to sell. If it is, we can take you through the process in as short as 30 days.

Not sure if your business is ready to sell? We asked our expert team of investors for their key tips to getting acquired on Amazon, backed by our tried and tested evaluation process.

What’s a common mistake people make when deciding which offer to take with their valuation?
The most common mistake we find is that people look for the highest dollar value, in lieu of going with a fully-funded cash buyer. There are a number of scenarios where this leaves the seller worse-off, that they may not immediately consider because of the sticker shock (in a good way). For instance, if the seller believes there’ still a lot of growth in the business and they believe in the buyer’s operating ability. If the seller is amenable to being paid an even higher amount within one to two years (the bulk of which would be paid upfront), there’s a strong likelihood that they will receive up to 50% greater cash by participating in the company’s growth through structured, seller friendly deals — the very likes of which we are very equipped to offer at Acquco.

The other thing to consider when choosing to go with a not fully funded cash buyer is that these buyers have to raise money for every deal, so the seller is assuming the risk that the bank denies their loan, and they are left (1) without a deal, and (2) in a weaker position to begin the process anew.

How long does it take for a seller to receive their payout?
Every deal is structured differently, because every business is different. Most deals have a large degree of money upfront, and then are structured to defer payout based on the seller’s alignment with the overall growth plan, and their desire to participate in that plan. Usually this type of earn-out structure means they receive the full payment within 1–2 years.

What’s involved in due diligence?
We evaluate your business and verify financial records to ensure that the information provided matches expectations. Our team of experts will help you through each step to make the process easy and pain-free.

What is considered a good exit?
We champion a clean, easy process, which is where Acquco’s institutional mergers and acquisitions team shines. We have a team that has completed over $40B in M&A and they understand exactly how to structure an efficient process for the seller and buyer.

What happens to my business after it sells?
Your business is your baby and we get it! We have an amazing team of Amazon veterans and eCommerce experts passionate about scaling Amazon businesses. Your business is in good hands… we’ll do you proud! Even better, we’ll share the results with you. We’ll check in with you every quarter and share how your business has grown.

Do I stay involved with the business after it sells?
Typically not, but for select situations, Acquco is amenable to having sellers join the growing team and have the ability to touch multiple brands.

Can you walk me through a standard deal process?
The standard deal process at Acquco is 30 days. During days one to three, we move extremely quickly to send an LOI if the company meets our evaluation standards.

During days three to 21, we conduct financial, commercial, and legal due diligence, with a focus on verifying the financial statements, brand operations, and the current supply chain structure. We have a prioritized checklist that is custom-tailored to each brand, and it makes the process much more efficient.

Lastly, in days 21–30, we negotiate the definitive agreement, which details all deal terms. After signing, we fund the account, close, and celebrate!

If you feel like you’re ready to exit your business, and to work with partners that will guide you through the process quickly, profitably, and expertly, get evaluated by Acquco today.

Acquco

Seamlessly exit your Amazon business in less than 30 days