We’ve heard the old Wall Street adage “Great companies are bought, not sold” more times than we can count. As career M&A bankers and advisors, we’ve never fully agreed with this.
In our experience, great companies are sold – deliberately, thoughtfully, and often after years of preparation and relationship building.
What looks like an overnight acquisition is often the result of years of groundwork between founders, strategic buyers, investors, and operators. Relationships are the underpinning of all transactions, yet the public rarely gets to see that part of the story.
In our experience, great companies are sold – deliberately, thoughtfully, and often after years of preparation and relationship building.
What the Data Tells Us:
We analyzed every US-based and Canadian software acquisition from the beginning of 2025 through Q1 2026 valued over $1 billion in enterprise value.
From this data, we found that 76% of these M&A transactions involved a pre-existing, publicly disclosed relationship between the target company and its eventual acquirer.
76% of M&A transactions between 2025 and Q1 2026 involved a pre-existing, publicly disclosed relationship between the company and its eventual acquirer.
This finding confirms that a majority of buyers didn’t discover targets during a formal, banker-run process. They already knew them and had a formalized relationship, often for years before the deal was consummated.
The most common connections between buyer and seller included:
- Product Integrations: 30%
- Buyer is an Existing Investor: 12%
In other words, by the time an acquisition happened, the buyer already had a deep familiarity – and often dependency – with the product, team, and strategic value within the context of their own company.
Norwest portfolio companies, Veza (acquired by ServiceNow) and Qualified (acquired by Salesforce), both announced transactions at the end of 2025. Each company spent years in dialogue with their acquirers, and both had their acquirer on their cap table prior to the acquisition.
Why Do Relationships Matter in M&A?
The most likely buyer for any startup (and arguably, the most reliable) is the one who has built conviction over time.
At its core, an acquisition is a decision fraught with uncertainty for buyers. No buyer has complete confidence when evaluating a company, especially in rapidly evolving markets populated by fast-growing startups. Long–term relationships help reduce that uncertainty and provide necessary visibility.
When a buyer is considering an acquisition, they are trying to answer far more fundamental questions:
- Does the product work at scale?
- How durable is the technology in a world increasingly shaped by AI?
- Can we trust this management team? Would they be a fit with our culture?
- How strong is the customer moat with this product?
- Is this capability strategically differentiated – or could we build it internally?
These are not questions that can be easily answered during the timeline of most banker-run processes. They are questions that often require years of observation, interaction, partnership, and internal debate – which is why strategic buyer engagement tends to move far more gradually than founders expect.
After Norwest portfolio company tvScientific closed its acquisition by Pinterest earlier this year, tvScientific founder and CEO Jason Fairchild described his approach to building relationships at the recent Norwest CEO Summit:
“From the get-go, I wanted to be very present in the market, through sales, thought leadership, and one-to-one relationship building with all the major players. I wasn’t geared toward selling, but made sure they knew who we were and how we differed,” Jason shared. “By the time of the acquisition, we’d basically met every strategic [buyer], and many of them had invested in our Series A or B.”
“From the get-go, I wanted to be very present in the market, through sales, thought leadership, and one-to-one relationship building with all the major players. By the time of the acquisition, we’d basically met every strategic [buyer], and many of them had invested in our Series A or B.”
– Jason Fairchild, tvScientific founder and CEO
What Can Founders Do to Build Relationships?
If there’s one thing to take away from our data and anecdotes, it’s that startups are far more likely to be acquired by someone who already knows the company. So instead of waiting until you are “ready” for M&A, we recommend founders start early:
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- Identify Your Most Likely Acquirers: Identify the top 5 organizations that make the most sense as strategic acquirers for your business and begin engaging them early and consistently. This is important even for early-stage companies that may have no concrete M&A timeline. We recommend strategizing with your board and stakeholders to create this list of names. Once you have the list, connect the dots on who can make a warm introduction.
- Build Intentional, Multi-Level Relationships: Within each strategic buyer, find the team and individuals you need buy-in from to be an acquisition candidate. Network across your own ecosystem to find commonality with each buyer.The strongest relationships span multiple levels of the organization over time from executives, product leaders, business unit owners, corporate development teams, and venture arms. Connections between boards, management teams, and operating leaders all matter. Having many advocates is critical to driving internal consensus and an eventual LOI.
- Demonstrate Long-Term, Strategic Value: Begin by crafting a clear narrative about why your company is a “must-have” asset in your space. We recommend building a strategic rationale for each buyer that answers questions such as: Are there opportunities to cross-sell or upsell? What strategic gaps would your company help fill? How are you planning to drive future growth?Partnerships, integrations, shared customers, commercial collaboration, and regular dialogue all build momentum through continuous flow of information and collaboration. These types of conversations keep you top of mind and help position your company inside the buyer’s workflow and long–term thinking.
- Enable Diligence in “Live Mode”: Remember that product leaders and deal sponsors need to have faith in you and your organization to make a case internally for acquisition. They will be much more confident if they can conduct long-term diligence in the form of understanding your organization’s decision making over time and your ability to deliver results. Diligence decreases the risk of integration challenges or failures. Basic data hygiene in record-keeping is critical if an inbound arrives. Keep your financials, tax and corporate documents, cap table and option grants, contracts, IP and product patents, and board or investor communications all updated and accessible so you’re ready to react quickly to M&A interest.
Ultimately, M&A is a long-term journey shaped by a series of positive interactions over time. Even when there’s no stated interest in a transaction, maintaining strong relationships, being responsive, and leaving buyers with a positive impression can meaningfully change future outcomes.
Ultimately, M&A is a long-term journey shaped by a series of positive interactions over time.
At Norwest, we have seen firsthand how strong relationships can shape outcomes. Over decades of partnering with founders, we have built relationships across strategic acquirers, investors, operators, and advisors throughout the ecosystems we invest in. We believe that founders should engage with the market leaders around them well before an M&A deal is front-of-mind. Strong relationships deliver outcomes, both in the short-term and long-term.
Whether a company ultimately remains independent, raises another round of capital, pursues a strategic acquisition, or explores the public markets, the underlying lesson – that’s backed by the data – is the same. The best opportunities rarely emerge overnight. They are built, relationship by relationship, over time.
