Is it important that your M&A advisor practices what it preaches? We think so.
As a bootstrapped M&A firm (we like to say “by bootstrappers for bootstrappers”) – and in kinship with many of our clients – we have allowed pragmatism and an unrelenting focus on top-of-market outcomes to foster our evolution into a distinctly product-driven advisory firm. Said another way, if you are a product-driven company, we think you have earned the right to work with a product-driven M&A advisor. And we have built Horizon Partners uniquely for you.
Unlike many of our peers, who employ a transaction sourcing model that includes a very large percentage of firm attention being dedicated to outbound cold calling and constant pitching of business, our model is low volume and execution-first, allowing us to dedicate most of our resources to our client companies. This allows us to help them in ways that are very high-touch, customized to what the business needs, and what we would term “artisanal” in nature. That is why we call Horizon Partners’ service offering “Artisanal M&A.”
Across our recent transactions, our artisanal approach has allowed us to deliver value well beyond the “typical” M&A service offering, including:
- Leading the transition of a client’s financial statements from cash-based to accrual / GAAP, while taking on a “de-facto CFO” role at the Company, working directly with a single bookkeeper to make the journal entries and update accounting policies and procedures. No expensive outside consultants; all built into our deal success fee.
- Spearheading efforts to modify pricing to better align GTM efforts and optimize total LTV of customer cohorts. These efforts have greatly aided growth at the critical time of a transaction for four Horizon clients in the past few years.
- Building a client’s books from scratch, literally moving from a stripe login, bank statements, and credit card statements to a Horizon-built set of quality of earnings-ready financial statements.
- Contributing to team building and identification + onboarding of new senior hires ahead of a transaction.
- Modifying strategic positioning based on in depth quantitative analysis.
- Constructing dual buyout structures to deliver post transaction board leadership that optimizes strategic insight, collaboration, and control for maximum success post deal.
- Crafting highly-complex, uniquely-customized transaction structures that involved multiple buyers with no previous relationship prior to Horizon’s identification of their complementary strengths. Horizon then curated a consensus-building and relationship-fostering environment that allowed the previously mutually-unfamiliar groups to partner together in an ideal combination. As one client put it, Horizon “architect(s) dream transaction structure(s) that I wouldn’t have thought possible…until they deliver [them].”
- Transitioning antiquated software development processes to agile methodologies to increase product velocity and team cohesion.
- Crafting of due diligence environments to focus on areas of strength while addressing known challenges in a manner that underscores upside instead of creating transaction apprehension.
- Delivering numerous transactions without the necessity of exclusive due diligence and negotiations, thus optimizing leverage and financial outcomes.
We recognize that our approach is distinctly different when compared against high-volume, sales-driven firms that employ a “standard process” and we have (at times, painfully!) learned that our approach won’t win all of the deals that we’d like to work on (it still hurts every time we lose, by the way!). However, we have also found that an outsized portion of epic product-first founders will want what we offer and will recognize state of the art M&A advisory when they see it. We are very grateful for this union in perspective, which gives us access to amazing clients.
From the foundation of our firm, we have found that many of the operating principles that have allowed our clients to develop market-leading products have allowed us to deliver top-of-market outcomes. In preparing a client for an M&A process, Horizon Partners goes far beyond the industry norm of a ‘marketing-driven’ or ‘rush-to-market’ process, opting instead for an engagement involving a much greater level of pre-go-to-market exploration, operational + strategic advisory, and execution depth. This is because almost every transaction for a bootstrapped business requires something unique to deliver a top-of-market outcome…but where that unique value resides varies from deal to deal and client to client.
Horizon’s artisanal approach allows for a higher-touch, partnership-oriented model. By digging into a client’s business (both in the “get-to-know-you” phase and once we’ve formally engaged) we’re able to identify key embedded strategic vectors and often come up with new insights about both realized and unrealized value that we can partner with founders to lean into ahead of a transaction. This often results in the Horizon team ‘plugging in’ to a client’s internal systems, assisting in optimizing certain areas of the business, advising on strategic initiatives, helping to make key-hires, etc.
Many M&A firms tout the number of tombstones on their website as evidence of success. While completing many deals is certainly a great achievement, Horizon Partners values quality over quantity. Firms that employ a ‘rush-to-market’ strategy often miss key value creation opportunities and nuanced aspects of a business. We like to partner with exceptional companies and often construct complex artisanal and creative deal structures that fit their unique businesses. A “Horizon deal” is not a “one size fits all” transaction where the process is “rinse and repeat.” Instead, every engagement is tailored specifically to our client’s unique business, goals, and both current and latent growth opportunities. We have found that everything matters a lot because what matters most will vary across transactions. We have built our firm to optimize not around our transaction volumes but around your individual transaction’s success. When that is the goal everything matters and nothing is a commodity.
The deal we closed for EverTrue and ThankView in 2021 is an excellent illustration of our unique approach and artisanal deal structuring focus. We initially engaged with ThankView in the summer of 2020 after months of dialogue and centered our early work on uncovering the best evidence of the Company’s future “growth story.” In doing so, we identified some very compelling product-led growth (“PLG”) motions. However, we also found that other motions like pricing didn’t fully align with PLG. Given what we felt was immense upside potential in building closer alignment, we advocated for and aided in revamping ThankView’s pricing structure from “seat-based” to usage-based while also revising the company’s terms of service and customer success function to map to the new pricing model and align fully with PLG. Additionally, we stepped in as a “de facto” CFO, and assisted the team with a cash to accrual financial statement transition and in planning for ongoing PLG and gratitude relationship management product execution.
During our early engagement work on financial, strategic, and product initiatives, an opportunity presented itself to take ThankView to market together with EverTrue. After managing the initial complexity associated with a combined process that didn’t yet include a merged company, we went to work on the combined financial picture of the business, building strategic narratives that would elegantly inform the market just how compelling the opportunity was, and developed a path for the two companies to merge simultaneously within the wrapper of a private-equity backed recapitalization. In doing so, we were effective in delivering the combination as growth ready, highly complementary, and exhibiting tremendous latent operational leverage. Part of the beauty in the combination involved EverTrue’s outbound, enterprise-driven sales model integrating with ThankView’s large, bottoms-up funnel and viral go-to-market superpowers, creating a compelling union of a very high ACV enterprise motion with a high velocity PLG funnel. This has yielded a vast surface area for cross-sells and future M&A. Rubicon Technology Partners was identified as an ideal fit for the businesses and the results are evidenced in what EverTrue’s and ThankView’s CEOs Brent and JD have to say about the transaction.
“While there are numerous reasons why we are grateful to have hired Horizon, the most salient is that they were ultimately highly successful stewards of our complex sponsor-backed merger and recapitalization. To reach the tremendous financial, strategic, and partnership outcome with Rubicon, Horizon at times slotted in operationally, putting on their CFO, strategy, and corporate development hats to help us make important decisions. This high-touch approach was critical in Horizon’s becoming so well versed in the nuances of the market and combined business that they could masterfully pitch that combined entity to many investors not familiar with such exotic initial transactions.”
– Brent Grinna & JD Beebe, Co-founders, EverTrue & ThankView
More to come on what makes our product-driven, artisanal M&A model so powerful for founder operated businesses in future posts!
Horizon Partners is a boutique M&A advisory firm for bootstrapped software & technology businesses. To learn more, subscribe to the Horizon Partners blog or email us at firstname.lastname@example.org.