Our Blogs

21. 06. 2018

Is Your Translation Agency Ready For Investment?

An injection of outside capital is a pivotal moment for business growth – but how do you know when the time is right?For self-funded LSPs who have developed step by step as cashflow allows, investment can unlock the potential to scale rapidly and push the organization to the next level.It can also bring on board valuable strategic experience from investment partners, and position the founder for an eventual exit at a significantly higher valuation than would be possible without this boost.We look at how business owners can know when the time is right to take this step.Preparing a business for outside investment isn’t just a necessary step for actually securing the funding, it’s a highly valuable exercise in its own right. It’s not unusual for language services agency owners to uncover things during the process that help them understand the work that is necessary before the company will be ready to accept outside capital.Whether you are actively considering funding or benchmarking how your business is currently running, here are some important checklist items to help you gauge how you rank:1) Do you have a defined strategy?A business strategy should help potential investors to understand the precise problem your business is solving and for which customers. In the LSP space, this is as much about what your company isn’t as it is about what it is. One the global issue of communication has been presented (i.e. helping end clients overcome language barriers in business), investors will need to know exactly where your company fits into the spectrum of technology and service offerings available to buyers of language solutions. A strategy should give investors detailed insight into topics such as brand identity, product/service differentiators, pricing, target vertical markets, workflow and technology integration, together with an awareness of competition and general market conditions. Critically, your strategy should illustrate how value will be created and realised for all shareholders.2) Do you have detailed growth forecasts?Growth forecasts show investors exactly how their money is put to work. Not only are investors interested in how fast and how far you believe you can grow with their input, they’re anxious to see how your company’s past performance data links into future growth models to substantiate projections. This means you need to lead potential investors carefully through the rationale for arriving at the numbers you do when building your model, and help them achieve a sense of confidence that your forecasts are founded on a steady base of supporting data – not cheerful optimism alone.3) Is your team ready?This can be easily overlooked as the number-crunching takes priority, but high on any investor’s own qualifying checklist is the leadership team of the company they’re reviewing. A hard-working and charismatic founder is a definite plus, but everybody runs out of bandwidth at some stage, and investors will be wary of a business that depends on the current manager making all of the major decisions or pulling all the strings. Not only should the company’s core competency areas such as sales, marketing, production and IT be covered by a capable team, investors should have confidence that the team is committed to the company’s long-term growth and success.4) Does your plan have gaps?At its most basic level, an investor’s appraisal of whether to commit capital to a new enterprise will rest on how clearly the business plan illustrates every step of the growth journey. This means showing investors that there is nothing (or at least very little) in your plan that is based on supposition or speculation. Business plans which depend heavily on growth from creation of new services or penetration of new markets can be less compelling than those which offer a clear and progressive path to scale through expansion of existing strategy.* * *Adaptive M&A works with both passive and active sellers in the translation and localization industry, helping them explore market opportunities and connect with well-matched buyers for their language agencies.You can learn more about Adaptive M&A’s services for sellers here. 
07. 06. 2018

A Guide to Valuing Equity in SaaS Sales Compensation

Commissions and bonuses aren’t the only way salespeople earn serious money in the software industry - with so many new market entrants launching in the SaaS space, many companies offer some form of equity as a way to attract top talent.But how do you calculate the value of equity in a compensation plan, and should it outweigh job opportunities offering more in guaranteed earnings when choosing a new role?The allure of equity isn’t hard to understand.When a software company is acquired for head-spinning sums or makes the headlines with a jaw-dropping IPO, the shareholders pocket life-changing amounts of money from the proceeds.Who wouldn’t want to be along for a ride like that?It’s the reason equity has such a magnetic appeal as part of any compensation package, and many ambitious SaaS sales professionals will be faced with a difficult choice more than once in their careers:Take the ‘safe route’, and go with a job that offers a high salary and a proven track record of creating successful sales repsOr...Share some risk with an up-and-coming employer who sweetens their lower pay package with an enticing equity pieceGoing for the equity could be your ticket to fortune, but it could also leave you kicking yourself for not taking the ‘bird in the hand’ if things don’t work out how you’d hoped.So what to do?When it comes to equity, there are no crystal balls that can show the future.But there are some basic steps to follow to gauge of how much faith you should place in your opportunity to participate as a shareholder, not just an employee.For anyone trying to get a clearer understanding of how to qualify equity offerings, read on.Grants vs OptionsFirst things first, what are you even being offered? A grant means you are being given shares in the company. An option means what it says – you are being the option to buy shares, under a specific set of conditions.Share options are the most common type of equity offered to employees joining start-ups.They give you the right to purchase company shares at a predetermined price, and often within a fixed time window. The price is known as the strike price or exercise price, and when you choose to purchase some or all of your allocated shares, this is known as exercising the option.The concept is simple – early employees get a chance to buy shares at a low price, below the value on the open market. They can then either sell these shares privately, or wait until the company is acquired or goes public to reap the rewards of the difference between the strike price and the eventual sale price.For both grants and options, the details on what you can and can’t do with your shares (such as selling them to someone else, what happens after you leave the company etc.) is usually detailed in a separate agreement.Shareholders agreements are of critical importance and should be weighed in the balance along with more obvious factors such as how many shares you have the chance to own.Most options will include a vesting period or vesting schedule. This means that although you have a contractual right to your equity, you can’t have it all at once.Vesting schedules typically mean that you have to ‘unlock’ access to your allocated shares either through employment tenure or performance.It’s common for vesting schedules to include a ‘cliff’, often one year in duration. This means that your shares don’t vest when you start work, but only once you are a year into the job. If you leave before this, you’ll leave empty handed.Vesting isn’t only based on time. Some employers will offer you the chance to accelerate your vesting schedule by hitting performance goals, or the vesting for those participating in equity plans might be linked to the performance of the company as a whole – say hitting a certain revenue threshold.Calculating ownershipIt’s important to know not only the number of shares you are being offered, but the total shares outstanding. The relationship between these two determines how much of the company you own.Most companies will have a fixed employee equity pool of 10-20% of total shares outstanding.It’s also important to be aware of share dilution, which is what happens when a company issues more shares. When new shares are issued, there are now more available and the percentage owned by existing shareholders therefore decreases.Other factorsWhile it’s an obvious point, it’s surprising how often employees fail to investigate a company’s exit strategy and time-frame.Although the board is unlikely to share its full strategic secrets with a new hire, it’s reasonable to expect some frame of reference to help put the value of your equity in better context, especially if you’re being offered equity to compensate for a below-market guaranteed pay package.It’s also possible to get a read on a company’s valuation, often based on previous investment. Ultimately, share price market value is where the magic happens in equity programs, and if you’re able to see a rising trend in valuation through sequential fundraising rounds then you may be onto a winner.After all, owing 0.01% of a booming software business is better than owing 50% of a sinking ship.The Wealthfront blog includes some great articles dealing with the complexities of employee equity.AngelList also has a great tool to help job-seekers sort salary and equity compensation by various job filters.You can also check out this helpful calculator used by shared inbox application developer Front.* * *Looking to get your hands on some equity? Adaptive Tech recruits for start-up and early-phase innovators in multiple SaaS sectors, including MarTech, AdTech, FinTech, HRTech and more. Feel free to reach out for a networking conversation, or browse a full list of Adaptive Tech’s sales vacancieshere.
06. 06. 2018

How to Move Up Fast in Ecommerce

Global ecommerce continues to grow at a rapid rate, with digital experience giant Adobe’s recent $1.68bn purchase of platform provider Magento underscoring the anticipated future value of the sector.Adaptive’s recruiters are often asked ecommerce professionals what they can do to accelerate their career growth and capture the potential of this fast-evolving space.Here are some ideas on how to move up the ecommerce career ladder fast.Let’s tackle the most obvious question first – if ecommerce is such a thriving, fast-growing space, why do people need career advice? Surely everyone’s getting swept along with the current, onward to bigger and better things?Well, it’s important not to mix two issues – just because an industry is growing rapidly doesn’t necessarily mean that everyone involved is feeling or benefiting from that growth in their everyday lives.While trailblazing tech visionaries may be busy inventing the next generation of game-changing ecommerce tools, there are thousands of career ecomm professionals spread across every major online retailer whose day-to-day may not reflect that excitement.But the good news is, they can get a piece of the action if they try.Look at an example Adaptive’s digital recruitment team encounters frequently: an eCRM Manager two years into their career, absorbed in a weekly loop of email marketing layouts and click-through rate reports, and wondering when the ecommerce gold rush they read so much about is going to reach them.Sure, they have a foot on the career ladder, but what’s next - Senior eCRM Manager, maybe in another year?Not the jet-powered ascendancy they’d hoped for.Here’s what we advise when candidates ask how they can springboard their own ecomm careers forward:- Offer pro-active solutionsSometimes everyone can get blinkered by the scope of their current role, but to move towards the top of ecommerce you have to start thinking and acting like someone at the top. Why else would you deserve to get there?Senior ecommerce managers aren’t following someone else’s gameplan, they’re thinking for themselves, being creative and trying out ways to generate results.Taking this approach in your own role can change your career trajectory overnight. Many people grumble that their roles are too implementation heavy and not strategic or creative enough, but have never pro-actively brought any strategic or creative thinking to the table.This doesn’t mean becoming a troublesome maverick and refusing to follow instructions, it just means bringing ideas for improvement under your own steam and going beyond the basics of your role description without waiting to be told.- Ask for exposureAs any senior executive will tell you, a big part of career development is ensuring that your ambition is clear to your superiors. If that ‘ambition’ only comes in the form of an annual wrangling over salary, then your superiors haven’t got much to work with.Instead, give your managers a clear signal that you want to learn more and contribute more to the team.This could mean asking to sit in on meetings that aren’t part of your usual rota, getting more involved with partners and suppliers, or suggesting books and courses that the company might contribute towards.- NetworkAn oldie but a goodie. Networking is a practice designed to create opportunity, and if you don’t participate you’re missing out. Sites such as Meetup.com offer great chances to meet like-minded professionals. Adaptive has worked with candidates who’ve funded their own way to conferences like eTail and Shoptalk, rationalizing the ticket prices not as a cost but as an investment in their future.  * * *If you’ve got advice to share with ecommerce professionals looking to build their careers, we’d love to hear about it below.You can check out Adaptive’s active E-Commerce job vacancies here.
09. 04. 2018

Riding the tide - when is the right time to sell your services business?

Business owners sell their companies for a multitude of reasons, both personal and professional.Selling a company can be a tough process, and the steps involved can be both expensive and a distraction from daily operations. The process can also be an emotional one, as many entrepreneurs in the SME bracket will only sell a couple of companies during their careers, perhaps only one.With so much at stake, the question this article poses is when is the right time to sell?For most business owners, timing is the hardest part of the sale process to analyze.In terms of valuation, for many services industries the governing factors are relatively straightforward – typically based on profitability, location, revenue growth, balanced customer base, vertical market specialism and any relevant technology or branding differentiators.For those who know their markets and have strong visibility across the commercial landscape, identifying a potential buyer is likely not the most challenging aspect of the sale process either. Smart sellers seek a strategic match where the acquisition adds value to the buyer through diversification, technology, niche-market expertise or regional presence.What is often less clear to owners of small and medium businesses is timing – when to sell their business to achieve maximum valuation, secure the right strategic fit and avoid downtime on a false start.The balancing act performed by entrepreneurs involves acknowledging that the optimal moment to sell all or part of their company can be the very same moment when it appears there is every reason to retain full ownership – when wind is in the sales, revenues are climbing, new customers are rolling in month on month and the business has ample potential to move into new markets.Owners without a clear exit strategy risk falling into the trap of waiting for an undefined “right moment in the future” to sell their business, and may focus their energies on building towards this goal.For many this can mean a vision of a company with stable, consistent EBITDA which has acted on every easily visible market opportunity for expansion and diversification.In the eyes of a buyer, however, these elements do not always signal a great deal. If a seller is over cautious in waiting for the stars to align, this can portray a company that has lost its dynamism and future potential to an investor. A business can shift from an exciting asset to a bolt-on acquisition appealing to a limited pool of buyers, with forecasted ROI based on maintaining performance rather than continuing to innovate and grow at a fast pace.According to Crispin Pike, who sold his IT security business, Sysec, to Herjavec Group, “your business should be on the up when you offer it for sale, with growing profits, reinvestment, employment opportunities and new markets, geographies or product lines” (Telegraph). Ironically this may seem like the ideal moment to remain at the helm of the company, but for others it can be the ideal moment to sell. A surge of forward momentum and readily accessible future opportunity can excite investors more than a tried-and-tested balance sheet with no evident signs of a future uptick in performance.The right timing and sale scenario is always going to be a complicated decision for any seller, but some things that help give a better chance of capitalizing on the golden moment include: defining exit goals, listening to the market & talking to advisors.An exit strategy with goals is key - running a company knowing that the owner will want to sell it “one day” can mean that lucrative scenarios pass by them continuously and they are unaware. If a business owner’s goal is retiring with funds to finance a lifestyle, then this helps quantify the goal and identify when this might be achievable. Younger owners may wish to sell a portion of their equity to a larger buyer or a PE group and join an executive management team with a view to a second exit. Being aware of what an owner wants, be it liquidity or future upside, is invaluable in helping them run their company and shape it towards an ideal acquisition scenario.Business owners are also well advised to continually listen to the market and evaluate if M&A activity in their space is gathering pace or cooling off, and to track valuation multiples where publicized. These indicators can signal to an entrepreneur that it might be a good moment to re-evaluate their current exit time-frame. Many SME owners ignore obvious signals that buyers are active in their space because they are working towards their balance-sheet-driven future moment when they will be “ready” for sale. In some cases the market dictates the driving force behind acquisitions more than owner plans. Entrepreneurs can miss the boat by waiting too long, with buyer’s appetites and PE investment slowing down.Keeping open channels of dialogue is also essential for the process, as third parties and consultants can help provide some guidance and expertise within fragmented markets where public M&A data is less available. As long as conversations with prospective buyers, advisers and investors are always managed on clear terms, business owners can build valuable networks and relationships and position themselves to stand strong chances of achieving their goals.
02. 04. 2018

Bikes of Berlin

In June, the team in Berlin went on a bike tour of the city. The company that we found offered several different options, but we unanimously chose the tour named “Cool, unknown spots” that featured stops that are not on the typical tourist route. We started the tour in the historical Nikolai Quarter of the city, which was the site of the first settlement in what is today Berlin.
01. 03. 2018

Adaptive Globalization in Puerto Rico

In March the Adaptive US team jet set to Puerto Rico! Covered with a landscape of mountains, waterfalls and the El Yunque tropical rainforest, this beautiful Caribbean island did not disappoint. Upon our arrival, after the NY team took a trip to Costco for the weekend’s provisions, we all met at our Airbnb oasis to greet each other and enjoy our first drink of the trip! From there we wasted no time and went straight to the beach for Beach Olympics! The Olympic games included whiffle ball, football (American) and a 3-legged race (with a photo finish)! The competition was fierce. After an eventful first day at the beach, we all made our way back to the house for a night of BBQing and good old-fashioned fun, soaking in the sunset in our backyard paradise. One of our favorite activities from the trip was the waterfall hike through El Yunque rainforest. Fun fact – this is the only tropical rainforest recognized by the United States National Forest System! The trek through the magnificent outdoors was worth the destination as we ended our route at a breathtaking waterfall! Some other highlights from our trip include chicken fights in the ocean, poolside gymnastic lessons by Meagan, Paul’s sunburn, and a couple nights out on the town in the capital, San Juan. On our last night, we took in the culture of Old San Juan, a neighborhood featuring colorful Spanish colonial buildings and a vibrant salsa dancing scene! All in all, we had a wonderful time in Puerto Rico. Many thanks to those who helped plan this trip!