Why ‘manifesting’ the sale of your business works

‘Deathly quiet’ would be an apt description for the UK M&A market last year, with the number of deals falling by almost a third year-on-year. Not since 2016 have we seen so few deals completed. And you have to go back a decade to see a lower total in terms of combined value.

The Forecast for 2024
What does this tell us about 2024? The year marks a global political milestone, with four billion people voting in democratic elections. Changes in government could make or break the M&A market – while elections can bring about new opportunities, they create uncertainty in key areas such as market sentiment and policies.

In uncertain times like these, it is key for entrepreneurs to recognise the value of network, in both building valuable connections and driving interest to your door. Examples of founders who can vouch for this are Adrian Sutton, co-founder and CEO of Vortex, and Salili Pajwani and Sophie Surowiak-Long, respectively CEO and CGO of ?What If! Innovation.

With over 60 countries going to the polls in 2024, this year makes for intriguing context for the global background of founders. In the UK alone this will influence the M&A market as business owners either act sooner fearing legislation that may negatively impact their deal prospects or else react if conditions change in their favour. For example, when the National Security and Investment Act was introduced in 2022, UK M&A transactions were highly affected due to the high-level analysis needed to ensure they fitted with the Act regulations.

Home Grown Club, the only private members’ club dedicated to entrepreneurs and scaleups, recently surveyed its membership as part of its five year anniversary, where members said a third of their closed business deals were a result of marketing. Members’ clubs are sometimes underestimated for the likelihood of tangible outcomes – Home Grown has proved an exception to the rule. Almost all of its members (98%) value the social aspects of what the club offers, along with the more functional advantages such as utilising meeting rooms, dining or staying overnight. In business – especially when founders are looking to grow – serendipity is often key.

Adrian Sutton – Vortex
Adrian Sutton sold air quality monitoring business Vortex to Marston Holdings in 2022, after successfully building partner sales channels in the Smart City and Traffic Management space. Timing was key. The heightened societal focus on air quality driven by a pandemic played its part. Despite COVID accelerating Vortex to acquisition, it also meant that Sutton held off selling for 12 months to allow the market to re-settle.

Sutton, however, saw the light in this, and used this time to allow his business to grow. He places considerable value in the support system he surrounded himself with, and allowed himself time to build meaningful connections. Sutton now runs a business called Wigs and Pens, and advises entrepreneurs who are going down the same path: “Don’t be afraid to pivot, as your primary responsibility is to grow the business on behalf of your stakeholders. If you grow the business and are diligent on those things, the exits tend to look after themselves.” With the M&A market having a sense of uncertainty in 2024, entrepreneurs should look to Sutton’s advice, and remind themselves that waiting to reach exit may not be the worst thing.

Salil and Pajwani and Sophia Surowiak-Long – ?What If! Innovation
Just as Sutton’s prospects were impeded – and in other ways bolstered – by the pandemic, the 2008 global financial crisis was of grave concern for ?What If!’s founders Salil Pajwani and Sophie Surowiak-Long. To get through this, Pajwani and Surowiak-Long learnt the importance of patience and preparedness – as their team’s patience and creativity eventually led to an unexpected offer from Salesforce. Ultimately the deal didn’t go through, following a change in management at the software giant, who sensed they would “leave money on the table”. The leadership and operational changes made subsequently enhanced the value of the business and resulted in a more successful sale to Accenture. While 2023 wasn’t coined as a financial crisis as such, its inflationary environment meant this level of uncertainty is something current entrepreneurs may find relatable, as increasing interest means greater costs for M&A deals.

Now running an advisory firm, 2nd Stage, the pair reflect that collaboration and community remain key to their business outlook. “We’ve had a couple of really good instances,” Pajwani recounts, where simple conversations led to introductions with potential clients and partners. Surowiak-Long adds that they have purposely sought to surround themselves with “people running proper businesses,” rather than “kids with a startup and a computer”.

The Cruciality of Networking
Both companies put their exit success stories partially down to having a benign “community” of entrepreneurs they could turn to. Not only is this valuable for building beneficial relationships, it is also necessary for business growth. Through panels, dinners, ‘drink and canapes’ networking events and talks, entrepreneurs can gain valuable insight into building, maintaining and accelerating a business. Being part of a members’ club also facilitates more intimate conversations between founders and investors, whether that be over a coffee or lunch, that can then lead to unexpected interactions that turn a business in the right direction.

What’s next for M&A
So far in 2024, we have seen an uptick of expectations of companies reaching exit status. Over half of CEOs surveyed in PwC’s annual survey said they were expecting to make at least one acquisition in the next three years, compared to only a quarter who said this over the previous three years. While this appears  positive, the founders who achieve the desired outcome will be the ones who create the right openings.