Using social media to sell your business – the changing M and A scene
Social media can be a great tool to help the sale and purchase of businesses. The benefits of social media marketing are well established; but, how it can be used as a platform to bring those looking to buy and sell businesses together, and also within the M and A process itself, is less well known.
The dating game
Social media can provide an online network for: deal sourcing; matching appropriate buyers and sellers to improve efficiency; communication; and secure information sharing.
In recent years the use of LinkedIn has soared, meaning it is easier than ever to form new like- minded contacts.
A survey by Intralinks back in 2013 showed that more than 55% of deal-makers reported using social media to help plan and execute M and A strategies, with more than 33% using an online deal network to support deal sourcing.
This demonstrates an increasing level of successful deals being initiated through deal networks internationally.
Knowledge is key
For those not yet ready to use online deal-sourcing, social media platforms can still have their uses.
The wealth of information now available via social media is changing the way that due diligence information is gathered.
For example, it may be useful to see what employees might be saying about their company or give insight about how customers really feel about a company’s products and services – even if this is just used as a “sense check”.
Social Media, beware the hype
Using social media is never without risks though, and this is equally true in the sphere of M and A.
When it comes to reliability of due diligence information, bear in mind that it is a source of information, not the source of information.
In addition, whilst it can increase the efficiency of deal processes, companies should have social media policies to help manage the risk that sensitive information may become public.
Social media is intended to be used spontaneously as a quick and informal method of communication, but company statements, even for example, tweets, must be closely monitored during transactions or reporting periods for listed companies.
If using social media to assist with due diligence, increased webpage activity carries the risk of tipping off employees about a potential deal and accidentally revealing confidential information. LinkedIn for example provides its users with “profile view” alerts.
Cautious use of social media should however enable both buyers and sellers to reap the benefits of our increasingly connected business world.
You might also be interested in a previous Media and Technology blog on the topic ‘Who owns social media content?’
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