This week on the Digital Velocity Podcast, Chris Yates of Centurica joins Erik and Tim to discuss growing digital businesses through acquisition.
Chris describes two key questions to consider when determining whether or not you are ready to buy another business. He says to first ask,
“do you have excess capital and if not, do you have access to credit, meaning the ability to get loans? If not, do you have the willingness and ability to raise capital because at the end of the day acquisitions are pretty capital intensive, unless you’re like an amazing deal structurer who can get people to do a hundred percent earn-out or something like that, but generally it will take some capital upfront?”
Chris explains that the second question to consider is,
“do you have the operational infrastructure in place to be able to onboard this acquisition? I would say, ideally, you would have at least a brand manager or some kind of a leader. It could be a CEO of that division that you acquire, or your goal would be to acquire a company that that leadership team will stick in place.”
Whether you are interested in the buying or the selling side of acquisition, you won’t want to miss this week’s episode.
About the Guest:
Chris Yates is co-owner of Centurica, a company that offers buy-side due diligence for digital businesses. He’s also the founder of Rhodium Weekend – a vetted community of digital entrepreneurs and investors. Chris has decades of experience acquiring, investing in, and operating portfolios of digital businesses and has advised on hundreds of millions of dollars of digital business acquisitions.