Dealmaking Lessons From Mark Leonard
The journey and learnings from building a software acquisition empire
Welcome to the first weekly edition of Atlasview Insights. Every Wednesday we’ll be sharing bite-sized insights that are relevant to small business owners, dealmakers, and investors. Whether it’s an industry report or a tweet from a fellow dealmaker, we’ll be sure to share valuable content from across the Atlasview network.
Weekly Musings
Last week we attended an event where Mark Leonard (Founder & CEO of Constellation Software, which has acquired over 500 software businesses) was the keynote speaker. We shared some of our learnings on Twitter and were blown away by the amount of engagement and interest the tweet received. That says something about Mark, his experience, reputation, and wisdom.
If you didn’t have a chance to read the tweet, here’s a shortened summary of the key takeaways:
What he would change about Constellation if he started over:
Change incentive structure to be focused on organic growth. The current incentive structure caused managers to become acquisitive over everything else.
Go global sooner, especially large regional platforms outside North America.
The worst deal that he ever did:
Constellation once acquired a business located in North America. A day after closing, all the founders and employees left, started a new company and contacted all the customers, and got them to switch to their new company.
Leverage:
3 forms of leverage are knowledge, people, and capital.
Knowledge leverage is actually relatively easy to obtain if you focus in a specific area.
People leverage is hard, you need to develop leadership skills to obtain it.
You eventually want all 3 forms of leverage.
Business Advice for a newcomer:
Read a lot (business history, biographies).
Experiment frequently. The scientific method is the best method for any business.
Mentorship
Finding a good mentor is hard because no one who is successful/smart will have time for a mentee.
Find something you can do for them, and add value to them somehow. Something they're genuinely interested in & you just happen to be good at.
Dealmaker Perspectives
It’s great to see Brent active on Twitter recently. He’s shared some great insights over the past week. From sourcing to deal structuring insights, all very valuable content.
Not to mention…
Atlasview’s Investment Criteria
We look for the following characteristics in our partner companies:
Industry: Software and tech-enabled businesses
Size: Minimum $1m EBITDA or $5m ARR
Geography: The US & Canada
Business Profile: Sticky B2B customer base, Experienced management team
Whether you’re a business owner interested in working with us, or an intermediary with a deal to share always feel free to reach out and get in touch with us!
Software Multiples Up vs. Q3
The team at Sampford Advisors shared their monthly software m&a update. For any fellow dealmaker or software founder looking to stay up to date on valuations and deal activity- highly recommend you subscribe (here). Over $17 billion was invested in November across 144 transactions in the software and internet space. The report noted that revenue multiples have expanded month-over-month. Look at the dispersion in percentile benchmarks back in Q4 2021….
Thanks for tuning in to the first weekly edition of Atlasview Insights. We’ll be posting bit-sized content every Wednesday with longer-form pieces going out on a bi-weekly/monthly basis. We have a ton of content lined up for small business owners, deal makers, and investors. Lots of valuable topics including:
Buying businesses
Optimizing cash flow for your business
Preparing your business for an exit
Inner workings of an emerging private equity firm
Scaling customer acquisition
Deal sourcing and structuring
Software and technology investing
Make sure you subscribe and share with anyone that may be interested.