Artificial intelligence has quickly become the most talked about technology in recent years. While generative AI like ChatGPT and AI-powered search engines like Google Bard and Bing are getting lots of attention, there are also some powerful innovations bringing AI to a surprising range of use cases and industries. One example is using AI to help sell your online business.
A big trend right now among online business entrepreneurs is that when business owners get to the point of deciding to sell a business, they don’t want the process to take too long. They want to quickly, painlessly and efficiently find the right buyer. This need for speed also works for the opposite side of the transaction. Prospective buyers of online businesses don’t want to get lost in the clutter of too many choices and irrelevant listings; they want to quickly zero-in on the right businesses that are relevant to their expertise and a good fit for their investment goals.
AI can be the missing link for more efficient online business exits and acquisitions. With the power of AI, online business sellers and buyers can get a more precise sorting and matching process to help prospective deal partners get connected faster.
Let’s see a few reasons why AI can be the next “killer app” for selling online businesses.
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Expectations are rising for online business mergers and acquisitions
Small online businesses, such as ecommerce stores, content-based websites and blogs, mobile apps and software-as-a-service (SaaS) solutions, have become a larger part of the “Main Street” of the digital economy in recent years. As these business categories have grown, there has been increasing interest from investors and rising expectations for how to make M&A deals for these businesses.
Selling a business is a huge decision, both financially and emotionally. It’s kind of like selling a home; you’ve poured years of time, work and effort into this asset and you want to get the best price that the market will bear. When you list your online business for sale, you don’t want it to linger on the market or attract a bunch of tire-kickers who are not serious buyers. When online business owners decide to exit, they want to quickly and efficiently connect to a shortlist of qualified buyers who are genuinely interested in buying a business and who are ready to talk about details and advance to a deal-making stage.
For investors, the process of buying online businesses has traditionally been too full of friction and clutter. If you’re an online business investor, you don’t want to have to sort through a bunch of irrelevant listings or get spammed by sales pitches. Your goal as a business buyer is to quickly find relevant, high-potential acquisition opportunities that are a good fit for your investment goals and expertise.
AI can help meet these rising expectations for both sellers and buyers. With AI-powered recommendations and smarter search capabilities, online business sellers can quickly get their business on the radar of qualified buyers, while prospective buyers can use AI tools to meet their unique investment goals and get access to high-potential deal flow on tap.
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Institutional investors want to find relevant, profitable online businesses
Online businesses are not just for solo tech geeks working out of their garages anymore. Digital Main Street businesses are attracting increased interest from sophisticated institutional investors, such as family offices, private equity firms and aggregators. These larger investors have more complex needs than first-time online business buyers or solo entrepreneurs.
For example, if you’re an institutional investor looking to buy online businesses, you typically will have a larger portfolio of online businesses that you want to match or expand. Your team will likely have a certain industry vertical or space that you prefer to invest in, as that fits your expertise and experience. You might also have certain deal size parameters or other unique data points that you’re looking for to help determine whether an investment is a good fit.
AI for buying online businesses is an essential development for sophisticated institutional investors. Machine learning and AI-powered recommendations can help these investment teams quickly surface and hone in on a list of potential M&A targets that fit their parameters and investment goals, with higher accuracy and at scale.
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AI will become a ‘personal assistant’ for online business M&A
There’s been a lot of hype and chatter about AI and what it means for the future of humanity and how people work. Will AI replace all human knowledge workers? Will AI make people obsolete? I believe that these fears are overblown. AI will be like any other technology that humans have developed: as we learn how to interact with these tools and build them into our workflows, AI will help people work better and faster. It might eliminate a few jobs in the short run, but it will ultimately create many more new opportunities for humans to do more of what they do best.
Here’s how that might look for online business M&A. Think about the traditional process of buying or selling a business in the pre-digital era. You had to work with a business broker. You had to set up a listing. You had to market the business and look for qualified buyers. Some deals might have happened by word of mouth or within a known universe of investors, but the process took much longer and was unnecessarily complicated and costly.
Today, as AI capabilities continue to improve, we’re going to see AI become a kind of “personal assistant” or digital intern that helps online business buyers and sellers do their deals faster, more efficiently, and with greater precision. AI will be a friendly digital helper that is with you at every step of the way — offering up smarter searches, better recommendations and more accurate results, leading to more constructive conversations for business sellers and investors.
AI is going to drive big changes in how every industry operates, and the online business M&A space is no different. But the future is bright. By eliminating friction, clutter and costs from the process of buying and selling online businesses, entrepreneurs can do more of what they do best: building successful companies and delivering value for customers.
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