Getting M&A Ready: A Guide for Tech Founders
For many founders, an M&A transaction is the most important, and often most rewarding, event in their entrepreneurial journey. But while some transactions begin with a carefully planned process, many are triggered by an unexpected inbound offer from a strategic buyer or investor. Whether that approach comes from a known player or an unknown third party, the outcome often hinges on one thing: how prepared the company is to respond.
At Sampford Advisors, we’ve seen firsthand that successful M&A outcomes don’t just happen, they’re earned through thoughtful, proactive preparation. In our view, success occurs when preparation meets opportunity. And preparation doesn’t mean being actively “for sale”, it means having the right foundation in place so that when opportunity knocks, you can engage from a position of strength.
The best transactions tend to happen when a founder doesn’t need to sell but is ready to. That level of readiness allows you to move quickly, create a competitive process, and drive toward an optimal outcome. In these moments, preparation becomes your greatest advantage. To help founders build that advantage, we use what we call the SCORE Framework, a five-part approach designed to make your business transaction-ready long before you ever formally go to market.
Succession and Tax Planning
The first step is Succession and Tax Planning. A potential exit can happen quickly, and it’s never too early to plan for what comes next. Founders should consider how involved they want to be in the business post-transaction, whether they have a succession plan in place, and how over-reliant the business is on any one individual. Robust planning here includes thinking through continuity for key leadership roles and working with a CPA or tax specialist to understand how different deal structures can affect net proceeds. For example, many founders fail to account for after-tax outcomes or the potential benefits of setting up structures like family trusts. These details may seem far off but handling them in advance can significantly impact long-term financial and operational flexibility.
Constructing Your Working Group
Next is Constructing Your Working Group. Surrounding yourself with the right internal and external team is essential. Internally, it’s important to identify a small, trusted group who can support the preparation process and eventually help execute the transaction. Externally, this is where experienced partners, particularly legal, financial, and M&A advisors come into play. Having the right professionals involved early means you’re not scrambling to educate new advisors in the heat of a transaction. A good M&A advisor doesn’t just find buyers, they help you shape the story, structure a process, and create competitive tension to maximize outcomes. Most importantly, they enable founders to stay focused on running the business while the deal machinery moves forward in parallel.
Organizing Your House
Organizing Your House is the third critical step. Buyers will scrutinize every corner of your business, from financials and contracts to HR, compliance, and technology. It’s essential that your documentation is complete, your books are clean, and your internal systems are up to date. Founders who take the time to build a centralized data room, clean up their cap table, and ensure GAAP-compliant financials are far better positioned to move through diligence quickly and with minimal disruption. These behind-the-scenes details may not drive valuation directly, but they do build buyer confidence and reduce deal friction, which often proves equally valuable.
Reflect on Your “Target Take-Away Number”
Another important, and often underappreciated, aspect of preparation is Reflecting on Your “Target Take-Away Number.” Founders tend to focus on headline valuations, multiples of revenue or EBITDA, but real outcomes depend on what you walk away with after taxes, fees, and potential earnouts. It’s crucial to define what success means for you personally. Is your goal to fully exit? Are you open to rolling over equity into a new platform? Would you stay on in a leadership or board role? Having clarity on these questions before entering negotiations gives you the ability to assess offers based on your true objectives rather than getting caught up in abstract valuation metrics.
Early Relationship Fostering
The final element of the SCORE Framework is Early Relationship Fostering, and this one is especially powerful over the long term. Building relationships with potential buyers early, before you’re ready to sell, can lead to much stronger outcomes down the road. This means keeping a running list of interested parties, taking the occasional exploratory call, and identifying which industry players (including customers, channel partners, or competitors) might be logical acquirers. Founders should also engage with industry experts—lawyers, bankers, and other M&A specialists—to stay educated on what buyers are looking for and how the market is shifting. These conversations help build visibility and credibility, and they ensure you’re top of mind when acquirers come looking.
Conclusion
When a company is fully prepared across all five dimensions of the SCORE framework, it doesn’t just react to M&A interest, it capitalizes on it. At that point, bringing in an M&A advisor can transform readiness into results. An advisor will help assess whether the timing is right, build a compelling narrative, structure a competitive process, and guide the company through diligence and negotiation. Importantly, they act as a buffer, allowing you to continue running and growing your business while they manage the deal process.
In today’s market, M&A success doesn’t happen by chance. It’s the result of thoughtful planning, relationship building, and expert execution. Founders who invest early in becoming “exit-ready”, even if they have no immediate plans to sell, are the ones best positioned to seize opportunity when it arrives.
If you’re a founder in the Canadian tech space and want to understand what readiness looks like for your business, we’d love to connect. At Sampford Advisors, we’re here to help you prepare with purpose, so you can respond with confidence when the time is right.