It's many an entrepreneur's dream. You get a call from Apple or Google, offering to buy your rapidly-growing business. Someday, that dream may come true, although you know you're facing tough odds.
But with so few companies reaching the acquisition stage, it takes a little something extra to capture the attention of one of the big dogs.
There are a few things that seem to be common among startups that go on to earn impressive acquisitions.
Build for Demand
Most large corporations acquire for their own purposes. Amazon is a prime example of this, with its startup buys generally feeding directly into its own products.
The company has put significant money into A.I. in recent years, for instance, to power its own voice-activated digital assistant, Alexa.
To position yourself for an acquisition by one of the top performers, pay close attention to the direction they're going. You should be considering products or services that might fit in with that.
If your specialty is cloud hosting, for instance, note Amazon's domination of that space. What services might you introduce that enhance what they're doing?
Build a Buzzworthy Product
When you look at the products everyone's talking about, there are usually several things they have in common.
One is that they're usually very unique, standing out in any overcrowded startup space.
Another is that they often meet a previously-unfilled demand. When something comes along that enhances consumers' lives, they're likely to tell others about it.
But it isn't enough to manufacture a product and hope others find it. You need to invest in marketing that lets people know you exist.
For new startups, the first few months are essential to success, including using creativity to get the word out. Finding brand ambassadors can make a big difference, especially if you combine that with your own social media efforts.
There are services that help with this, but you should also do your own research and interact with top thought leaders on social platforms in your areas of interest.
Investors prioritize scalability when choosing businesses for their portfolio. You need to think long-term when building a new business, always equipping yourself to answer questions about how you'll sustain your business model once new customers come along. You need a plan for adding team members and finding funding to move to the next stage.
Think of a large corporation looking at your business. Will they see the growth potential? Will they want to buy the technology behind your product or the entire business?
Early on, you'll likely want to pursue patents on aspects of your business that might capture the interest of larger companies, since the proprietary nature of what you do may be more likely to get their interest than anything else you're doing.
Choose Partners Strategically
Like so much in life, it's all about who you know. Strategic partnerships are definitely among the top reasons for acquisition.
If, for instance, your first round of funding involves someone closely associated with Facebook, your social media-geared product may get an extra look because of that association.
As you start adding employees, also keep your acquisition goals in mind. While talent and experience are important, bringing a former Google exec in to lead your sales team or hiring a VP formerly with Uber's app development unit could get your business noticed.
A survey conducted by TechCrunch found that a new company has a higher chance of getting acquired after landing funding, even though that chance is still remote.
So, if you want to get the attention of companies with deep pockets, the more rounds of funding you can close, the better those odds.
Any study of acquired companies can be skewed, however, since many companies choose to remain independent. For those companies, stopping at the Series A or Series B stage may simply mean they had the funding they needed to get to the next phase.
If acquisition is your business goal, there are some things you can do to position yourself to get attention. The best thing you can do though is to focus on building an amazing business and let your own company's growth speak for itself.