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---6
7# M&A Playbook
8
9Frameworks for both sides of M&A: acquiring companies and being acquired.
10
11## Keywords
12M&A, mergers and acquisitions, due diligence, acquisition, acqui-hire, integration, deal structure, valuation, LOI, term sheet, earnout
13
14## Quick Start
15
16**Acquiring:** Start with strategic rationale → target screening → due diligence → valuation → negotiation → integration.
17
18**Being Acquired:** Start with readiness assessment → data room prep → advisor selection → negotiation → transition.
19
20## When You're Acquiring
21
22### 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?
26
27### Due Diligence Checklist
28| 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 |
36
37### Valuation Approaches
38- **Revenue multiple:** Industry-dependent (2-15x ARR for SaaS)
39- **Comparable transactions:** What similar companies sold for
40- **DCF:** For profitable companies only (most startups: use multiples)
41- **Acqui-hire:** $1-3M per engineer in hot markets
42
43### Integration Frameworks
44See `references/integration-playbook.md` for the 100-day integration plan.
45
46## When You're Being Acquired
47
48### Readiness Signals
49- Inbound interest from strategic buyers
50- Market consolidation happening around you
51- Fundraising becomes harder than operating
52- Founder ready for a transition
53
54### Preparation (6-12 months before)
551. Clean up financials (audited if possible)
562. Document all IP and contracts
573. Reduce customer concentration
584. Lock up key employees
595. Build the data room
606. Engage an M&A advisor
61
62### Negotiation Points
63| 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 |
70
71## Red Flags (Both Sides)
72
73- No clear strategic rationale beyond "it's a good deal"
74- Culture clash visible during due diligence and ignored
75- Key people not locked in before close
76- Integration plan doesn't exist or is "we'll figure it out"
77- Valuation based on projections, not actuals
78
79## Integration with C-Suite Roles
80
81| 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 |
89
90## Resources
91- `references/integration-playbook.md` — 100-day post-acquisition integration plan
92- `references/due-diligence-checklist.md` — comprehensive DD checklist by domain
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