This week’s interviewee is Neil Wisdom (pictured), co-founder and business development director of Crannog Software, which was acquired by Fluke Networks last month.
How does an Irish software company set itself up for a sale?
One of the key criteria is the market you’re in and how much growth that market is seeing.
In our case we tried to increase our brand too. We engaged resources to do that, attended shows and made the effort to make personal contact with a lot of the manufacturers. That wasn’t just achieved through plain advertising. Word of mouth spread an awful lot.
We made them believe our story that this technology was going to be far more used and far more prevalent.
Crannog never had any external investment. Why?
We were very careful: we didn’t take in any VC funding. We felt it would take control away from what we believed in and what we were doing.
Because it was our money, we were far more conscious of it. It’s not the same if you’re spending someone else’s money. If it all gets lost, you’re not personally out of pocket.
What about the criticism that Irish entrepreneurs can only take a company so far and no further?
I wouldn’t think it’s a valid criticism. To an extent, the green-eyed monster comes out. If an offer is there, a lot of people will accept that.
The question is: how prepared is a person to hold back from that and say they want to stay in control?
Some Irish companies perhaps sold out too soon. But that’s down to the individuals, not the industry or a trend.
What are the reasons for this?
It comes down to age and general experience levels. If you start on a shoestring and you’ve never been on a sound financial footing, the minority would say that if someone is prepared to buy them small, there’s a much bigger pot at the end.
So Crannog was never set up specifically for a sale?
We had a number of ideas that we wanted to bring to market and be rewarded for our success and whatever happened after that was a bonus.
We had our minds made up that [any offer] would have to be on very specific terms. Our idea was to keep the people and the products because that’s what we grew the business on.
What if an offer had come from a rival, or someone looking to asset strip the business?
If a competitor had approached us, I genuinely believe we would have turned it down.
By Gordon Smith