Six Degrees' co-founder Campbell Williams has launched a consultancy firm to "disrupt" the mergers and acquisitions (M&A) market.
Williams co-founded Six Degrees in 2011 and oversaw 19 acquisitions, before leading Six Degrees' own management change in 2015 when the firm was acquired by Charlesbank.
Speaking to CRN, Williams said that SMBs in the tech and comms space are often underserved when it comes to M&A services, with most corporate advisory firms only interested in bigger targets.
With this in mind, Williams' Sunfish Advisory will provide a range of services to business owners that are either looking to sell their business or acquire others, but have no experience in the M&A arena.
"The vast majority of the guys out there started a business, quite often from their garage, and they're usually entrepreneurs or tech guys," he said.
"Most of them have never bought a business, so if they've been looking at acquisitions as part of a growth strategy then it's a really new thing for them.
"Certainly none of them have ever sold a business because the chances are that they've started a company in their mid-twenties and have been running it for 10 years, so they've got no experience in how to get a successful exit going."
More often than not, Williams said, these firms will bring in a corporate finance advisor who will spend a couple of weeks looking at the business and start getting the books in order.
This gets the financials in order, he said, but does not address a range of other key areas that prospective buyers will look for - things like market research, go-to-market messaging and branding.
"Typically they're ill-prepared," he said. "Guys like Six Degrees that buy companies for a living will start slicing back at those things and realise that what they say might be correct, but they haven't got any data to back it up. There are a lot of things that they don't realise they need to do."
Williams said the initial target for Sunfish is to build up a community of M&A experts, buyers and sellers in the tech and comms sectors so that bosses have access to the necessary resources.
Sunfish has already started publishing free materials on its website to guide people in the M&A space and plans to hold a series of events to help connect people. Longer term, Williams said Sunfish will look to guide specific parties through their M&A activities with monthly or quarterly consultations.
Williams added that Sunfish will encourage businesses to take a longer-term view of their exit strategies, rather than take the quick route often recommended by corporate advisors.
"There is a tendency to say ‘We have X million pounds in the bank and we have no debt'," he said. "That's a lovely message for customers because it shows they're stable, but actually it's a sub-optimal capital structure if you're looking to create exit value.
"You could be in a position to use some of that cash to do some small scale M&A to enrich your product portfolio to create equity value for yourself. A lot of companies don't even think about that because they think M&A is just for the big boys.
"We're looking at that sweet spot of £1m-£5m revenue where they're thinking ‘I might quite like to buy a couple of businesses' or ‘I might be able to double my exit value with some significant investment, but I don't know where to begin'."
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