SaaS founders with successful companies often learn what is important to serious acquirers too late in the game.
What is valuable to a buyer right now is sometimes different from what was important to a founder as they grew their company.
This can surprise a capable founder who spent a major portion of their life building a successful company, only to find that financial buyers or strategic buyers see things differently this year.
Harry Hopkins is one of three co-founders of Viewgol, a medical billing analytics platform that drastically improves revenue cycle management (RCM) for physician practices in the US.
Viewgol grew from three founders in 2019 to almost a thousand employees in 2023, with no outside investors. They successfully funded their explosive growth with revenue from product sales and service offerings.
After years of rocket-ride growth, they tried to find a growth partner and talked to many PE firms. Then they hired an M&A advisor and talked to many potential acquirers.
Viewgol was recently acquired by CPSI, a larger player in the medical billing space. It’s a great long-term home for the Viewgol team and products, Harry explains on the podcast this week.
Harry says they were extremely successful in serving their customers and growing a valuable company, but they learned a lot of M&A lessons late in the game.
As Harry described on the Practical Founders Podcast this week:
“I would have done a few things differently if I knew how we were going to be valued in the end. When we went through this whole M&A and acquisition process, that’s when I really learned how the financial markets value a company,” Harry says.
“We always managed by cash flow and growth. We always made sure we were cash flow positive and invested in our expected growth. But when it comes to actually selling a company, you should be taking on that financial discipline probably 24 months before you’re planning on exiting.”
Should you always start with the end game in mind? Or hire a savvy M&A advisor? Or chase the changing whims of potential buyers?
It’s not that simple or easy.
But it’s always advisable to understand what potential acquirers value earlier, before it’s too late to make adjustments.
Work on it every year even if you’re not trying to sell any time soon. And get as much help as you can.
Keep building your own way, but be clear about what will drive the highest valuation for your company if and when you sell it.
You can listen to this podcast interview with Harry Hopkins here on the Practical Founders Podcast.
Thanks for sharing your amazing growth story, Harry!
#practicalfounders
