M&A Playbook
Frameworks for both sides of M&A: acquiring companies and being acquired.
Keywords
M&A, mergers and acquisitions, due diligence, acquisition, acqui-hire, integration, deal structure, valuation, LOI, term sheet, earnout
Quick Start
Acquiring: Start with strategic rationale → target screening → due diligence → valuation → negotiation → integration.
Being Acquired: Start with readiness assessment → data room prep → advisor selection → negotiation → transition.
When You're Acquiring
Strategic Rationale (answer before anything else)
- Buy vs Build: Can you build this faster/cheaper? If yes, don't acquire.
- Acqui-hire vs Product vs Market: What are you really buying? Talent? Technology? Customers?
- Integration complexity: How hard is it to merge this into your company?
Due Diligence Checklist
| Domain |
Key Questions |
Red Flags |
| Financial |
Revenue quality, customer concentration, burn rate |
>30% revenue from 1 customer |
| Technical |
Code quality, tech debt, architecture fit |
Monolith with no tests |
| Legal |
IP ownership, pending litigation, contracts |
Key IP owned by individuals |
| People |
Key person risk, culture fit, retention risk |
Founders have no lockup/earnout |
| Market |
Market position, competitive threats |
Declining market share |
| Customers |
Churn rate, NPS, contract terms |
High churn, short contracts |
Valuation Approaches
- Revenue multiple: Industry-dependent (2-15x ARR for SaaS)
- Comparable transactions: What similar companies sold for
- DCF: For profitable companies only (most startups: use multiples)
- Acqui-hire: $1-3M per engineer in hot markets
Integration Frameworks
See references/integration-playbook.md for the 100-day integration plan.
When You're Being Acquired
Readiness Signals
- Inbound interest from strategic buyers
- Market consolidation happening around you
- Fundraising becomes harder than operating
- Founder ready for a transition
Preparation (6-12 months before)
- Clean up financials (audited if possible)
- Document all IP and contracts
- Reduce customer concentration
- Lock up key employees
- Build the data room
- Engage an M&A advisor
Negotiation Points
| Term |
What to Watch |
Your Leverage |
| Valuation |
Earnout traps (unreachable targets) |
Multiple competing offers |
| Earnout |
Milestone definitions, measurement period |
Cash-heavy vs earnout-heavy split |
| Lockup |
Duration, conditions |
Your replaceability |
| Rep & warranties |
Scope of liability |
Escrow vs indemnification cap |
| Employee retention |
Who gets offers, at what terms |
Key person dependencies |
Red Flags (Both Sides)
- No clear strategic rationale beyond "it's a good deal"
- Culture clash visible during due diligence and ignored
- Key people not locked in before close
- Integration plan doesn't exist or is "we'll figure it out"
- Valuation based on projections, not actuals
Integration with C-Suite Roles
| Role |
Contribution to M&A |
| CEO |
Strategic rationale, negotiation lead |
| CFO |
Valuation, deal structure, financing |
| CTO |
Technical due diligence, integration architecture |
| CHRO |
People due diligence, retention planning |
| COO |
Integration execution, process merge |
| CPO |
Product roadmap impact, customer overlap |
Resources
references/integration-playbook.md — 100-day post-acquisition integration planreferences/due-diligence-checklist.md — comprehensive DD checklist by domain
1---2name: ma-playbook3description: M&A strategy for acquiring companies or being acquired. Due diligence, valuation, integration, and deal structure. Use when evaluating acquisitions, preparing for acquisition, M&A due diligence, integration planning, or deal negotiation.4license: MIT5---67# M&A Playbook89Frameworks for both sides of M&A: acquiring companies and being acquired.1011## Keywords12M&A, mergers and acquisitions, due diligence, acquisition, acqui-hire, integration, deal structure, valuation, LOI, term sheet, earnout1314## Quick Start1516**Acquiring:** Start with strategic rationale → target screening → due diligence → valuation → negotiation → integration.1718**Being Acquired:** Start with readiness assessment → data room prep → advisor selection → negotiation → transition.1920## When You're Acquiring2122### Strategic Rationale (answer before anything else)23- **Buy vs Build:** Can you build this faster/cheaper? If yes, don't acquire.24- **Acqui-hire vs Product vs Market:** What are you really buying? Talent? Technology? Customers?25- **Integration complexity:** How hard is it to merge this into your company?2627### Due Diligence Checklist28| Domain | Key Questions | Red Flags |29|--------|--------------|-----------|30| Financial | Revenue quality, customer concentration, burn rate | >30% revenue from 1 customer |31| Technical | Code quality, tech debt, architecture fit | Monolith with no tests |32| Legal | IP ownership, pending litigation, contracts | Key IP owned by individuals |33| People | Key person risk, culture fit, retention risk | Founders have no lockup/earnout |34| Market | Market position, competitive threats | Declining market share |35| Customers | Churn rate, NPS, contract terms | High churn, short contracts |3637### Valuation Approaches38- **Revenue multiple:** Industry-dependent (2-15x ARR for SaaS)39- **Comparable transactions:** What similar companies sold for40- **DCF:** For profitable companies only (most startups: use multiples)41- **Acqui-hire:** $1-3M per engineer in hot markets4243### Integration Frameworks44See `references/integration-playbook.md` for the 100-day integration plan.4546## When You're Being Acquired4748### Readiness Signals49- Inbound interest from strategic buyers50- Market consolidation happening around you51- Fundraising becomes harder than operating52- Founder ready for a transition5354### Preparation (6-12 months before)551. Clean up financials (audited if possible)562. Document all IP and contracts573. Reduce customer concentration584. Lock up key employees595. Build the data room606. Engage an M&A advisor6162### Negotiation Points63| Term | What to Watch | Your Leverage |64|------|--------------|---------------|65| Valuation | Earnout traps (unreachable targets) | Multiple competing offers |66| Earnout | Milestone definitions, measurement period | Cash-heavy vs earnout-heavy split |67| Lockup | Duration, conditions | Your replaceability |68| Rep & warranties | Scope of liability | Escrow vs indemnification cap |69| Employee retention | Who gets offers, at what terms | Key person dependencies |7071## Red Flags (Both Sides)7273- No clear strategic rationale beyond "it's a good deal"74- Culture clash visible during due diligence and ignored75- Key people not locked in before close76- Integration plan doesn't exist or is "we'll figure it out"77- Valuation based on projections, not actuals7879## Integration with C-Suite Roles8081| Role | Contribution to M&A |82|------|-------------------|83| CEO | Strategic rationale, negotiation lead |84| CFO | Valuation, deal structure, financing |85| CTO | Technical due diligence, integration architecture |86| CHRO | People due diligence, retention planning |87| COO | Integration execution, process merge |88| CPO | Product roadmap impact, customer overlap |8990## Resources91- `references/integration-playbook.md` — 100-day post-acquisition integration plan92- `references/due-diligence-checklist.md` — comprehensive DD checklist by domain
KevinZai