MergerTech has announced that it will now accept bitcoin as payment for its merger and acquisition (M&A) advisory services.
The California-based company has a history of working to help tech companies with less than $100m in revenue achieve successful exits. For example, MergerTech brokered mobile banking startup Simple's $117m sale to megabank BBVA earlier this year.
Speaking to CoinDesk, MergerTech founder and CEO Nitin Khanna framed the company's decision to accept bitcoin as a way his team could learn more about the bitcoin ecosystem while gaining new clients seeking M&A deals.
Khanna told CoinDesk that he believes the time is now for MergerTech to move aggressively to court bitcoin businesses, saying:
"Companies that are innovating in bitcoin today will start getting bought by the Googles, the Microsofts and the Oracles. That's where we come in. We really understand the system where small companies get bought by larger companies, so we want to be ready in six, nine or 12 months to represent them."
Khanna went on to say that he believes the M&A market for bitcoin companies will grow to rival the now bustling mobile payments and cloud computing spaces.
"We don't feel bitcoin is any different," he added. "It's a massive innovation, it's getting funded, and for some of the companies, their exit will be through M&A."
MergerTech indicated that it will accept bitcoin privately, not through any merchant processor. Rather, when a MergerTech client wants to make a payment in bitcoin, it will set up an account with the customer's desired bitcoin service to receive the funds.
The firm will accept bitcoin for both the commitment fees it receives at the start of the project, and the success fees it earns when the project ends. Commitment fees, Khanna said, generally cost between $25,000 and $50,000, while success fees range from an average of $1m to as much as $5m.
"We'll be opening it up where clients can pay either of those two fees in bitcoin."
As part of the service, MergerTech will help its clients understand the potential sales opportunities they may be able to pursue and how much they might generate in a sale.
While receiving payments in bitcoin is a short-term goal for MergerTech, Khanna explained that, as an entrepreneur, he is also interested in using bitcoin for enterprise payments.
Khanna, who owns bitcoins personally, suggested that the bitcoin community would be wise to build solutions for larger businesses like his own, companies that must process thousands of dollars in payment every time a transaction occurs.
He suggested that there is no enterprise solution that can help a company like MergerTech convert the bitcoin it receives, while paying employees, banking partners and vendors with a share of the fee. As such, he hopes MergerTech can help make entrepreneurs aware of this pain point.
"If we don't start accepting bitcoin for larger payments, I don't think innovation in the enterprise space keeps up with the end consumer, small consumer payments," Khanna said.
Block chain and beyond
Khanna is also interested in advanced block chain applications given his past experiences as the chairman and CEO of Saber Corp, a software company that assisted governments with election management, motor vehicle management and voter registration, among other tasks.
Founded in 1997, the company was purchased by Electronic Data Systems Corp for $420m in an all-cash sale. Khanna co-founded the company with his brother and COO Karan Khanna.
His comments suggested that Khanna may be considering the potential uses of the block chain for his own initiatives, however, he stopped short of such a declaration.
"We're super excited about, not just the payments industry, but what the block chain can do for things like elections. Bitcoin starts as a currency but will spread across all kinds of startups."
Merger visualization via Shutterstock