Startup Funding Espresso -- Why Acquisitions Fail?

Why Acquisitions Fail?

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Not all acquisitions succeed.

Here’s a list of why some fail:

The buyer wants to eliminate a competitor by taking them off the market.

The acquisition was simply a means to an end and there was no intention of continuing the acquired business.

The investment thesis did not play out.

The proposed synergies of combining the two businesses never materialize.

The two companies don’t integrate well.

The proposed merger plan didn’t take into account culture differences, mission variances, and other factors that make combining the companies sub-optimal.

The company managers are not skilled at integration and make false assumptions about the prospects of a combined company.

The market conditions often change eliminating the initial thesis for merging the two companies.

Make sure you have a clear understanding of what the combined company will look like. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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