What Acquirers Look For in a Startup

To position a startup for a successful acquisition, it's essential to understand the key attributes that potential buyers are looking for. While specific criteria vary, most acquirers evaluate a target based on three core pillars: novelty, size, and visibility.

1. Novelty

• What it is: The startup must have a compelling and differentiated offering. This could be its technology, its business model, its brand, or its overall market position.
• Why it matters: In a crowded market, buyers are looking for companies that stand out from the noise. You don't have to be entirely unique, but you must have a clear and defensible advantage.

2. Size

• What it is: The scale of the business, typically measured in Annual Recurring Revenue (ARR).
• Why it matters: Size is a strong indicator of product-market fit, a healthy customer base, and a proven business model. Most large financial and strategic buyers have a minimum ARR threshold (e.g., $5M-$10M) before they will even consider an acquisition, as smaller deals don't provide enough strategic or financial gain to be worth their time.

3. Market Visibility

• What it is: The startup's reputation and presence in the market.
• Why it matters: A company with a strong brand and a well-known story is easier for buyers to discover and evaluate. High visibility, often achieved through consistent PR and content marketing, signals that the company is a leader in its space and can make it a more attractive target.