Shoot the Moon with Revenue Rocket

In this week's episode of "Shoot the Moon," hosts Mike Harvath, Ryan Barnett, and Matt Lockhart delve into a significant and exciting acquisition opportunity—Project Maya. The episode centers around the opportunity to acquire a specialized Philippine-based outsourcing firm renowned for its application support across various enterprise applications like ServiceNow, SAP, and Microsoft, among others....

Is it worth trying to time the market for a sale or not? Some of the questions we talk through: Can you explain the concept of "timing the market" in the context of selling an IT services business? What key indicators suggest it's an excellent time to sell an IT services company? How do macroeconomic factors influence the decision to sell an IT services business? What historical trends have you se...

How do you source sellers on your own, and why is it so hard? Here are some of the questions we are digging into in this episode: What is buy-side M&A Why should companies be considering buying other firms? What goes into buying a company? What’s hard about sourcing when your doing the deal yourself? How do you create the list? How do you reach out to buyers? How do you determine value? How do you...

Segment 1: The Hard Truth About Selling a Business Discussion on the complexity of the selling process Financial and legal hurdles that need to be overcome The emotional attachment to the business and its impact on the sale Segment 2: The Emotional Ties That Bind Deep dive into why selling a business is such an emotional time Identity and self-worth tied to the business The feeling of letting empl...

Segment 1: Understanding the Role of an M&A Attorney Primary focus of M&A attorneys: overseeing the legal aspects of buying, selling, and merging companies. Complexity of M&A transactions: due diligence, negotiation, drafting agreements, and navigating regulatory requirements. Why specialized knowledge in finance, tax law, and securities law is important Segment 2: The Generalist Lawyer: A Broad O...

This is a must listen for buyers and sellers! What’s the difference between 3X and 9X in a deal? Size Gross and EBITDA Profit margins Growth rates and forecast Technology specialization & Vertical specialization Type of revenue: contracted, recurring Client types and concentration Deal terms: equity, selling-in Strategic buyer: the right buyer can help drive the right multiple. Competition in a de...

De-risk your biggest investment (your company) by becoming a platform company. Essentially a platform company (like an App integrator or Managed Service Provider or Digital Transformation Firm) is a top quartile, well-run company that takes capital from a private equity firm or other investor. When a private equity firm is investing, a platform company might be the first to receive investment whic...

In the context of mergers and acquisitions (M&A), the terms "valuation" and "deal getting done" refer to distinct stages and aspects of the transaction process. Here’s a breakdown of the differences: ### Valuation 1. **Definition**: Valuation is the process of determining the present value of the target company. It involves assessing the company's financial performance, growth potential, market po...

Scenarios discussed in this episode: Taking yourself out of the business Staying in the business at above-market comp Addressing spouses or children in the business What to expect post-close: consulting agreement, employment agreement Adjusting to life after a change in income and receiving cash at close   Listen to Shoot the Moon on  Apple Podcasts  or  Spotify . Buy , sell , or gr...

2023 was a challenging year for many tech-enabled services businesses as many end customers deferred projects or reduced technology-related spending. This stressed revenue growth and gross margins, reducing EBITDA for many tech-service firms. It’s tough to run a business through these times, it's easy for founders to become exhausted dealing with less while trying to run the firm as best as possib...

Matt & Ryan take over this Shoot the Moon podcast episode! We're talking about revenue models in IT Services companies and how each model impacts valuations in an M&A transaction. Oftentimes recurring revenue leads to a higher EBITDA which leads to a higher valuation. The more recurring revenue you have, the more you can bump up that EBITDA range, but there are different types of revenue to consid...

If you get a deal on the table, when do you accept it? M&A advisors usually work from origination to close, however an advisor can be utilized for specific functions in the process like origination only on helping getting a deal across the finish line. There are many different ways in which an M&A advisor can assist you, like deal facilitation. What is deal facilitation? What’s the role in craftin...

What are the right elements for an introduction call What should you talk about, and what shouldn't you talk about What do sellers want to hear from buyers? Culture – the more specific you can be the better Strategic fit Capability of doing a deal Strategy after a transaction Highlighting why the seller was targeted What has to be shared as a seller What you do; service offerings How you sell and...

How do you bridge the gap between someone who wants $7M but you're company is worth $6? Do you take the gamble and put structure in it that sounds like a win win or do you cancel the deal? Tune in to find out! Win Win situations How big of an apetite does a buyer have? Do you take the RISK? What kind of structures do you use if you take the deal? Buyer and seller sharing in the risk What happens w...

What we cover in this episode of Shoot the Moon with Revenue Rocket: Start early alignment in the process Be aligned with your partners on selling in vs selling out Valuation becomes critical and ongoing Valuations are important Work through disagreements with your partners Listen to Shoot the Moon on  Apple Podcasts  or  Spotify . Buy , sell , or grow your tech-enabled services fir...

How do you determine ROI for an M&A transaction? Let's say you're acquiring a firm for $20M.. what kind of return on investment should you make long term from this acquisition? Learn all about ROI on M&A in this episode of Shoot the Moon. Introduction What is ROI? Factors affecting ROI in M&A investment Methods of calculating ROI Limitations of ROI Summary of the factors affecting ROI in M&A inves...

Over 400 of the 5000 companies on the 2023 list are IT Services companies!  Learn more about our inclusion on the Inc 5000 list here >> See Revenue Rocket's profile on Inc 5000 here >> Listen to Shoot the Moon on  Apple Podcasts  or  Spotify . Buy , sell , or grow your tech-enabled services firm with Revenue Rocket. 

In this episode of Shoot the Moon, we're talking about what we are seeing in the market for Q4 2023 M&A for tech-enabled services firms. Listen to Shoot the Moon on Apple Podcasts or Spotify. Buy, sell, or grow your tech-enabled services firm with Revenue Rocket. 

You’ve done a lot of hard work of finding a suitor and there’s an LOI you’ve agreed to. We want to walk through some of the major steps as you work towards a deal close. The linear flow! First comes the LOI, then a big due diligence list which could come with a quality of earnings, then there may be a chance for renegotiation of the deal, through this process you will get different data requests (...

When its tougher headwinds, it is tougher to demonstrate accelerated growth. The real value in your business is the historical growth, but uncertainty can be tough. Here's what we cover: Recent flat or down growth does not define your value Why IT Services is a great industry for M&A even with uncertainties - Valuations are still very high! Lots of options for selling in & selling out Valuations c...

Below is what we discuss in this episode all about Caps & Baskets in an M&A Process: Introduction Definition of indemnification provisions Importance of indemnification provisions in M&A deals Caps and baskets Definition of caps and baskets Differences between caps and baskets Why caps and baskets are needed Caps Upper dollar limit of the seller’s indemnification obligations to the buyer Negotiati...

We're answering the following questions in this episode of Shoot the Moon: What is a letter of intent? What is an indication of interest? What’s critical in a letter of intent? Why would you issue a letter of intent versus as indication of interest? The leading line of a letter of intent is it’s non-binding in nature. What portions of an LOI survive if the deal does not close? What are the benefit...

What will be the take home portion of an M&A deal: Taxes Working capital; harvest cash but need to keep cash in the business. Appropriate vs historical Extinguishing debt Legal fees Accounting fees M&A advisory fees Deal structure: seller note Deal structure: earn-out Deal structure: equity Listen to Shoot the Moon on  Apple Podcasts  or  Spotify . Buy , sell , or grow your tech-ena...

Even if you're doing strategy, at some point M&A is going to be something that is of major consideration. Mergers and acquisitions play a critical role in accelerating growth, and even if you started the company a long time ago, the end will eventually be in mind for an owner. Episode Summary: It’s common for founders to think a successful exit is on the future. Leave up to 50% of growth on the ta...

Episode Summary Expect a reps and warrants provision in a purchase agreement, both buyers and sellers will have reps and warrants. You’re vouching for what you provided is correct. Buyers will ask for some type of surety in reps and warrants; expect a hold back. That could be 10% of the cash in the deal. Reps and warrants are for pre-close activities; you’re attesting what your providing is true a...