Three ways to

make acquiring
your next
startup faster
and easier
Why read this?
When you’re looking to expand, acquiring an existing startup can be a great strategy. You can acquire
a business that’s already up and running and has proven market fit. Unfortunately, the mergers and
acquisitions process has historically been long and full of hurdles. And it can be risky for you as a buyer,
especially if there’s a lack of transparency about the company you want to acquire.

Fast access to financing also plays a huge role. If you don’t have the capital to make things happen, your
network tends to be make or break—you need the right connections to the right people at the right time.

But we, like you, think it’s high time for a change.

MicroAcquire and Pipe have partnered to offer you a new way to unlock and finance mergers and
acquisitions—whether you’re interested in SaaS, D2C subscriptions, a service business, or beyond. If you
come across the right deal at the right price, you shouldn’t have to miss out just because you don’t have
enough liquidity—and now you don’t have to.

The M&A landscape is finally changing. Here are three ways to make acquiring your next startup faster
and easier.

Who is this for?

If you’re a buyer looking for your next deal, this is the guide for you.

If your goal is an acquisition without all the age-old struggles and delays, we’ll share some key strategies
to make that happen.

We’ve also got a few bonus tips on how you can leverage MicroAcquire and Pipe to streamline the
process. MicroAcquire is a startup acquisition marketplace that allows you to connect with sellers and
find the right deal. Pipe is a trading platform for recurring revenue that provides non-dilutive financing so
you can close your acquisition deals quickly and economically.

But first, let’s take a look at the old way of M&A before we dive into how things are shifting.

The Evolution of Acquisitions

The old way
Traditional mergers and acquisitions were a cumbersome process full of delays, inefficiencies, and lost
opportunities. Due diligence and negotiations took months, and lining up the right financing at the right
time could be tricky, to say the least.

MicroAcquire | Pipe 1
Unless you were fortunate enough to have the cash on hand to finance the transaction you had to rely on
restrictive loans or dilutive equity financing that could complicate the deal and endanger your ownership
interests. (Not to mention the difficulty of coming by that financing in the first place!)

The new way

Today’s technology has helped consolidate the acquisitions market. You can connect with sellers easily
on MicroAcquire while also leveraging the power of recurring revenue as a source of financing with Pipe.
As a result, closing mutually beneficial deals is more cost-effective, efficient, and accessible—enabling a
new generation of entrepreneurs, like you, to succeed.

Three ways to make M&A faster and friendlier than ever

Here are three ways to streamline the acquisition process and avoid common pitfalls. These can help you
reduce your risks and end up with a better deal.

#1
Accelerate your due diligence
In some cases, the M&A process can be a bit opaque—to say the least. Sellers may not always have
transparent numbers that make it easy to see what’s going on inside their business. If you want your
acquisition to go smoothly with minimal risks and hurdles, a solid due diligence process is crucial to
ensure your target company is ready to be acquired and can meet your expectations.

Unfortunately, the due diligence process can be slow, which can be both expensive and risky to your
potential acquisition. Here are a few things you can do to speed up the process—without cutting corners:

1. Start early - The sooner you start your due diligence, the better. Get a head start so you don’t
risk the tail end of the process taking you past a deadline or allowing another buyer to swoop
in and steal your deal.

2. Gather key numbers up front - One thing that takes longer than doing due diligence on a
company is doing due diligence on two companies—so set yourself up to avoid false starts.
Establish the key numbers that will be deal-breakers for you and get those from sellers up front
to make sure the company is a good potential fit before you take a full due diligence deep dive.

3. Connect at the top - Get in touch with the founder or leadership team directly, if you can, to
expedite information flow. This can be a much faster way to gather information than relying
solely on intermediaries to pass along your requests.

MicroAcquire | Pipe 2
#2
Ask for seller financing
One of the biggest challenges in M&A is getting financing in place at the right time. Traditional debt
and equity financing can take months to line up—which might cause you to miss out on acquisition
opportunities because you can’t move quickly enough.

Seller-financed arrangements benefit both parties and bypass slow fundraising rounds or loan
application processes. This helps keep incentives aligned, so both buyer and seller are invested in
a successful long-term outcome. How does a typical seller-financed deal work? You might pay a
percentage up front (say, 25%) and the rest in installments over time. Essentially, the seller holds the note
so you don’t need to seek financing elsewhere. Bear in mind, however, that the seller might expect you to
pay a higher purchase price in return for seller financing.

#3
Consider earnouts
The value of a startup tends to be based more on what it can be worth than what it is worth today. That’s
because startups, by definition, are growing. The products and services they offer to their markets (and
the technology they use to deliver it) will create more and more value as they expand into the market.

One savvy way you can reflect this value in your purchase structure is to ask for an earnout (AKA
contingent consideration). With an earnout, you pay the seller a certain amount up front, with additional
payment contingent upon the target company reaching certain milestones after acquisition. This can
be a clean way to spread out acquisition costs while also aligning buyer and seller goals—contingent
consideration rewards sellers when their startups continue to perform well post-acquisition, and that
solid performance is what you’re really hoping for.

3 bonus tips:
How MicroAcquire + Pipe make acquisitions easier
To get the most out of your next acquisition, you need to identify the right seller, secure funding,
minimize risk, and maximize value, all while streamlining the process itself. Fortunately, technology can
help you out every step of the way.

MicroAcquire | Pipe 3
1. Connect with trusted sellers
MicroAcquire’s free acquisition marketplace lets you browse thousands of vetted startups and reach out
to founders to discuss acquisitions directly. Rather than scouring the market for the ideal opportunity,
you can filter trusted listings according to your acquisition criteria and then ask for more information.
The MicroAcquire team reviews every listing so you’re less likely to encounter unfortunate surprises, like
vacant websites or inflated valuations.

You can also see or request metrics like monthly recurring revenue, the number of customers, customer
acquisition cost, lifetime customer value, and churn rate, making due diligence an efficient, streamlined
process. This empowers you to quickly estimate your ROI and make informed decisions about
the acquisition.

2. Tap into alternative financing for faster funding and a faster deal
You might not have enough cash to buy a company outright, or maybe it’s tied up in other investments
or companies. Traditional financing methods like loans and equity aren’t ideal in these circumstances
because they can be slow—which means you can’t always achieve the terms or timing you need to make
the deal happen.

Here’s where Pipe’s non-dilutive alternative financing comes in. Pipe lets you fund your next acquisition
through quick access to non-restrictive capital so you can afford the right company at the right time.

How does it work? Pipe enables you to pull forward a portion of your company’s recurring
revenue to finance the purchase. Pipe isn’t a lender, so the capital you access doesn’t come with
the restrictive covenants of loans—and Piped funds don’t impact your ownership interest like
equity, either.

By leveraging the recurring revenue of your existing business to move quickly, you can improve your
chances of closing a deal. You can also leverage the recurring revenue of your target company to finance
the acquisition after coordinating with the seller.

Once you’re set up on the platform, Pipe gives you access to financing to seal the deal. You can have the
capital in your account in as little as 24 hours after you’re connected. No question marks, no limbo, and
no letdowns.

3. Leverage technology to enter the sale in a better position

There are a lot of moving parts when you’re looking to acquire a company—among them timing, costs,
strategy, and a little bit of luck. You want to take your place at the negotiating table in the strongest and
most confident position possible.

MicroAcquire | Pipe 4
 MicroAcquire uses technology to streamline the acquisition process and brings together 1,000s
of profitable startups in a single, consolidated marketplace. Pipe’s platform doubles down
on reducing the bias of finance, basing your trading limit on your recurring revenue and an
algorithmic rating of your business’ health while getting you funds in days instead of months.

Nothing improves negotiating power like having the information you need to make a truly informed
decision—and cash in hand to make a quick, efficient acquisition. MicroAcquire and Pipe can help you
with both.

In other words, you don’t need to walk away from a great opportunity. Instead, you can secure your
acquisition and projected return on investment by converting future recurring revenues into cash that
seals the deal.

Ready to get started?

Here are four steps to take you across the finish line for your next acquisition:

• Visit https://microacquire.com/buyers/ to sign up and start your search for a company to buy.

• Get pre-approved for your Pipe trading limit at https://pipe.com/microacquire/buyer.

• Use all or a portion of that trading limit to take advantage of an acquisition opportunity while it’s
hot, without restrictive debt or dilution.

• Seal the deal.

The future of your business

The future of mergers and acquisitions has never been brighter. Startups are being bought and sold
every day and bringing tremendous value to both sides of the deal.

With MicroAcquire and Pipe, you can find the perfect company and fund a fast, frictionless transaction.

Ready to take the leap toward your next venture? Get started by signing up with Pipe and MicroAcquire today.

MicroAcquire | Pipe 5