Previously, Aalto Capital explored the "synergy gap," noting that our research showed strategic buyers don’t always pay higher premiums in IT M&A. While valuation remains a top concern for most founders, it’s equally vital to understand the broader implications of selling to a strategic versus financial buyer. The decision has long-term effects on leadership roles, control, and the company’s future.

The key for founders is clarity about their objectives. If remaining actively involved in the business and steering its growth is a priority, financial buyers, such as private equity firms, are often a better fit. Conversely, for those seeking to step away or transition out, strategic buyers – who typically integrate acquisitions into their own operations – may offer the best path.

Strategic Buyers:

Strategic buyers acquire companies to enhance their own capabilities, whether by expanding market reach and their client base, gaining new technology, or improving efficiencies. These buyers often restructure the leadership team and integrate operations, which can lead to significant changes in company culture. For founders planning to exit, this route can provide a clean break but requires thoughtful succession planning to ensure continuity for employees and customers.

Financial Buyers:

Financial buyers, including private equity firms, focus on scaling the business as a standalone entity. They typically retain existing leadership, making this a suitable option for founders who wish to remain in control. These buyers often align incentives through equity rollovers, allowing founders to benefit from future growth. However, partnering with a PE firm requires a shared vision for scaling and adapting to a performance-driven environment.

In our experience working with founder-owned businesses, the most successful transactions begin with a clear understanding of post-sale goals. Whether it’s managing a transition with a strategic buyer or partnering with a financial buyer to drive the next phase of growth, setting expectations early ensures the deal is framed appropriately when going to market. Founders should think beyond valuation to align the deal structure with their long-term goals. With careful planning and the right buyer, they can achieve a transaction that maximises both financial outcomes and personal satisfaction.