ValueEdge founder Rohit Anand reflects on the payment structure of selling his company to publicly traded WNS for $20 million.
Insight
Anand: First-time founders need M&A advisors to enforce bidding timelines unemotionally
“So that can be best told by a third party. Because, you know you're always a bit nervous. You know, you were selling your first company. You know, you're talking to somebody in the transaction team or the M&A team of a large company. Do you tell that with that…”
Disclosure
Anand: WNS's initial acquisition draft mandated clawbacks for key employee departures
“And the, when we saw the shareholders, the first draft that came from, they was Shardola Merchant, WNS. We kind of had a heart attack, right? Because they had things like, you know, if somebody leaves, then they'll have a claw back and so on. They had identifi…”
Insight
Anand: Selling a company takes three times the effort of fundraising
“Let me tell you that an exit is at least three times more work and effort than a fundraise, right? If you think a fundraise is, you know highly energetic and, you know, takes a lot, very demanding. And I mean, an exit is at least three times”
Assertion Partly supported
Anand: ValueEdge sold for $20M with $17.5M cash and RSUs
“It was a twenty million dollar exit with, you know, 17.5 million cash upfront and then the balance in RSUs and all the cash 70% was you know, paid on day one and the 30% was paid over three years.”
Insight
Anand: Product companies yield higher valuation multiples than services for equal effort
“The effort and the time is the same, right? But just imagine the multiple that you get on a tech product company versus the product multiple that you get on the services company, and many good reasons for that are well known reasons for that. But, you know if …”
Assertion Not checkable as stated
Anand: Roche accounted for $2M of ValueEdge's $6.5M–$7M revenue
“In the short journey of Value Edge of seven, eight years, Roche became a two million dollar business. And in, in a company which eventually had a business size of around six and a half, seven million dollars.”