Buying a software company and moving the HQ

by a searcher from Grove City College

5 years ago

I currently work for a software company doing corporate development/M&A (operate on Danaher's model). We acquire about 3-5 software companies per year and most of those are sourced directly by my team and me and have no bank involved. 
I'm very interested in starting a B2B software search fund in the next year but have a barrier of geographic inflexibility due to my wife's career. I've been talking to my manager about the possibility of running a play that was created by Vista Equity, buying a software business on one of the coasts and moving the key employees to Texas (or re-hiring). This seems to create a lot of operational risks and I'm interested to hear from investors and other searchers if you've come across this model. Another idea is to look only for software companies that have a remote workforce but this, obviously, decreases the size of the funnel.

Thank you in advance for any insight. 

13 likes
306 views
11 comments

searcher from INSEAD

In my (non-US) experience, software companies are well tuned and have the mind-set to be managed remotely, as long as you stay close to critical product decisions and have a structured way to monitor sales. Moving (or losing) the teams is a distraction and does not add value, from the half-dozen examples I have seen first-hand.

5 years ago | like reply | 1 like

investor from University of California, Berkeley - Haas School of Business

It can definitely be done over time if the company is relatively small and you have a good engineering leader who can manage the local product team. In fact, I would say that it is industry standard to work in a virtual environment and all software companies I have worked for in the past had geographically distributed teams. You would probably need to commute to the HQ initially and then slowly transition headcount to the target location over time. I would probably leave the product team in the existing location and hire a good product leader locally who can help you manage it. Sales is often remote anyway. Most other functions can be relocated over time. I think the trick is to manage the additional distraction while you try to get up to speed and grow the company

5 years ago | like reply | 3 likes

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