Understanding the differences and nuances of strategic and financial buyers is important when entering into an M&A transaction. We dive into each type of buyer in detail in this episode of Shoot the Moon with Revenue Rocket.
The strategic buyer and the financial buyer: how do they differ? In this episode, Mike & Ryan discuss each buyer in detail.
A financial buyer is typically one who buys the business to get a reasonable return on their investment quickly. This buyer is driven by certain rates of financial return and may be looking at a portfolio of companies to buy.
A strategic buyer is looking to grow through buying a business that is strategically aligned with theirs, that fits into their business objectives, product & services set, culture, financials, geography, and other criteria.
At Revenue Rocket we look at 3 main criteria when working with strategic buyers and sellers:
If the combination has an aligned strategy and culture, they can usually find a path to financial fit. A strategic buyer is looking for capability enhancement to complete or broaden their offering.