Utilizing Marketplaces for M&A Deals. Third party marketplaces have really emerged in the past few years. These are services that a buyer or seller subscribes to to find deal related information and oftentimes try to match your company as best as possible through AI or manual matching. 

Matt Lockhart and Ryan Barnett discuss the evolving landscape of third-party marketplaces for M&A transactions in the tech-enabled services sector. They highlight the increasing interest in these marketplaces, driven by the growing recognition of the value in tech services firms. They note that while marketplaces like Axial, PE Marketplace, and GRV Source can broaden the pool of potential buyers and sellers, they also present challenges such as the generalized nature of listings and the need for specialized understanding and marketplaces are a useful tool but should be part of a broader outreach strategy.

1. The use of third-party marketplaces like BizBuySell, DealStream, Axial, and PE Marketplace for finding and selling businesses.
2. Marketplaces can be a useful tool to increase the top of the sales funnel, but require careful curation and alignment between buyers and sellers.
3. Buyers using marketplaces may not always have deep industry expertise, leading to potential misalignment.
4. Sellers should proceed with caution when using marketplaces alone, as significant work is still required to properly prepare a business for sale.
5. Advisors can play a critical role in helping both buyers and sellers navigate the complexities of the M&A process.
6. Competition for deals can increase when using marketplaces, as the goal is to get in front of as many potential buyers as possible.
7. Buyers should view marketplaces as one tool in their inorganic growth strategy, not the sole source for finding acquisition targets.
8. Proper cultural, strategic, and financial fit are essential for successful transactions, regardless of the sourcing method.
9. The group discussed the recent podcast episode on "Buying a Company is Not Like Buying a Car" and the importance of this mindset.

 

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