• Kelly:

    Here in the MMM Corporate Tech Practice, we take two to three calls each week from investors looking for hot companies in the Southeast. They all want SaaS revenue models. They want to know who has the best management. They want to know who's achieving 20–35% annual growth rates. And they want to write checks.

    The problem is that they have a hard time finding companies like this.

    Can you talk with me about this phenomenon?

    Chris Mailander:

    Yeah, absolutely.

    There are a lot of companies in the Southeast that would like to be a part of that conversation. Unfortunately, there aren't many that can. And that is really a product of three dimensions of a common problem that we see.

    The first dimension of that problem is the narrative.

    We see companies that try to make the case that they're in that target zone that you articulated. They're hearing from investors and acquirers that this is what the market is looking for. They want to characterize themselves as that hot company. And so they craft the PowerPoint to make their case. They show financials that get them into the zone.

    The problem is that the story doesn't map to reality.

    With sophisticated private equity investors and acquirers, they can sense when the story doesn't map to reality.

    We have to address that first.

    The second dimension of this common problem is anticipating the process ahead.

    Due diligence is tough. It is designed to reveal problems and risks.

    The lawyers, accountants, and technical experts all get paid to find those risks and problems—and they will.

    To get into the target zone, which is where the most value is created, we have to anticipate this process, prepare the management team for the tough questions that will be asked, and have a game plan to run the gauntlet.

    The third dimension of the problem that most companies face is timing.

    They get into the process and then discover they don't have the time or runway required to fix the problems that emerge.

    What happens, Kelly, is that when a company hasn't worked through these three facets of the challenge, one of three things happens:

    The conversation shuts down early.

    The options available to the company decrease.

    Or the price of the deal goes down.

    None of those outcomes are good.

    None of those get the company where it needs to be.

    And none of those are good for the shareholders.