Atlassian to fix outdated, inefficient and combative M&A process
20 June 2019, Written by David Simmons
When a big player comes knocking wanting to buy your startup it might seem too good to be true.
The wad of cash being waved in your face might prove irresistible and that's understandable; you've worked for years to get to where you are right now, and you damn well deserve that payout.
But big businesses know that M&A is a process that favours the buyer, not the seller, and especially not founders of startups.
One company in particular with serious amount of experience in the area is Atlassian and the Australian tech company has just released its Term Sheet to the public, giving power to sellers and introducing some semblance to the "broken" M&A process.
"It's outdated, inefficient, and combative. Which is why we're publishing the Atlassian Term Sheet to fix it," says Atlassian in a blog post.
"We're doing something that, to our knowledge, no company has done before: we've crafted a new M&A term sheet and we're making it public. The Atlassian Term Sheet is more favourable to selling companies than any we've seen among strategic acquirers in technology. It's guided by our research and includes explanations to make our approach more understandable. We've done this because we want to be fair to our future team members and we don't want to spend energy and goodwill on things that almost never matter."
If any company knows what is involved in the M&A process, it's Atlassian. Since it's founding the company has acquired more than 20 companies for approximately $1 billion. These include Trello, Opsgenie, and AgileCraft.
The company says that after personal experience plus significant research into the M&A process something needs to change.
"One thing has become very clear to us about the M&A process it's outdated, inefficient, and unnecessarily combative, with too much time and energy spent negotiating deal terms and not enough on what matters most: building great products together and delivering more customer value," says Atlassian.
The Term Sheet is primarily directed at founders selling a company for the first time, and while business owners should definitely get a lawyer involved if the chance to sell becomes a reality the Term Sheet is a guideline for business owners to not get dominated by big businesses.
"The Atlassian Term Sheet has the protections Atlassian needs and reflects the values we live by," says Atlassian.
"It's comprehensive we don't want to hide anything during term sheet negotiations. And it includes explanations to help you understand why we care about these terms."
"Now, with the Atlassian Term Sheet, we're providing tremendous visibility into our approach to M&A. We hope it gives founders a sense of what to expect during initial deal discussions and confidence that we're treating them equitably. And similar to our sales model, we believe this transparency will enable all parties to spend more time on the things that matter most: building great products together and delivering more customer value."
You can check out the Atlassian Term Sheet here.
Business News Australia
Author: David Simmons