By Jon Davage, M&A and PE tech lawyer,听Bermans
In March听cloud contact centre听start-up Mission Labs was acquired by listed communications software group Gamma听in a potential 拢46m deal.听听
Based near Rawtenstall in Lancashire听and launched in 2016, Mission Labs听has developed products including听CircleLoop, a听cloud-based telephony product which is fully serviced through web, desktop and mobile applications and aimed at the micro-business market.听听
Bermans, led by partner Stephen Jarman and assisted by several colleagues, advised Mission Labs on the deal.听
The price tag was partly听driven by Mission Labs product being integral to the development of Gamma鈥檚 business of being a听UCaaS听provider.听
It was for an initial consideration of 拢40.2m with听an additional 拢6m contingent on certain development milestones听over the next three years.听
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Mission Labs鈥� co-founders听Damian Hanson and David Hague have created a fantastic business听–听but听it highlights the appeal of听software as a service听(SaaS).听
Since September 2020, the deals market has been unprecedented, particularly in the North听West.听
SEIS/EIS funding is now extremely well developed and has benefited the tech sector by providing a bridge between HNW (high-net-worth) investors and Series B institutional monies.听
The appetite for businesses (particularly听SaaS), which have their own proprietary IP and growing ARR, does not look like it is slowing down in 2021.听
I鈥檓 delighted to say there are more deals involving听SaaS-based businesses in the pipeline.听
The technology sector remains extremely buoyant, driven by the need to work remotely and new technologies flourishing such as the blockchain and AI.听
In short, even old–world industries are now embracing technological solutions to drive efficiencies.听
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The non-tech pipeline also remains strong due to the availability of liquidity in the ABL (asset–based lending) and private equity markets.听
Increased activity in the listing markets also encourages the recycling of funds, which again drives activity.听
In terms of the听rest of 2021,听I predict more of the same with private equity leading the charge by direct investment and buy and build strategies.听
My advice to entrepreneurs is that if you have a good idea and are willing to work hard and see it through, you can succeed.听
But along the way, you need some help听–听and听it鈥檚 exactly because of that desire to provide help that I’ve co-authored a book with听听entitled听From听the Factory听Floor.听听
It provides practical guidance on the how, what and why to focus, prioritise, manage and do stuff for start-up ventures.听
In the book,听we share our experience, insight and听explain how to start and build a start-up around a core framework of essentials.听
The听book helps听entrepreneurs launch and build better and more successful tech start-ups.听
It is impossible (and quite inappropriate) to try to tell the entire start-up roadmap to success in a single book on entrepreneurship. What we鈥檝e tried to do is capture all the 鈥榤ust–丑补惫别蝉鈥�.听
The book covers many aspects as well as听legals, but here are some good pointers:听听
- Choose your inner circle wisely and remember you are taking the risks and have the ideas. Do not undersell yourself and learn when to say no听
- Know your share capital table inside out and do not give away cheap equity in the early days unlessabsolutely necessary. Bootstrap where possible, as gifting equity could be the most expensive funding you ever take听on听听
- Act like a big company from the start in relation to corporate governance,legals, tax, accountancy.听 Do not use online legal templates and pay a fair price for a good听lawyer听听
Once in place,听these building blocks will serve you very well.听
鈥�From the Factory听Floor鈥�听has been co-authored with Guy Remond and will be听available from the middle of听May:听听听
For further information contact Jon Davage at听jon.davage@bermans.co.uk