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Prepping for Exit - a Founder’s Perspective on M&A - Issue #12

Are you in the 58% or the 17% - exits via M&A vs Going Public via IPO?
Issue #12  •  February 19  •  View online  •  Suggest a link
Prepping for Exit - a Founder’s Perspective on M&A
Prepping for Exit - a Founder’s Perspective on M&A
Is it time to consider selling your startup? Looking for a founder’s perspective? Dave Parker is a five-time founder with >10 exits. This reading list is practical advice on prepping for exit, pricing and the process.
Are you in the 58% or the 17% - exits via M&A vs Going Public via IPO?
How Do You See Your Exit?
Silicon Valley Bank just came out with their 11th Annual Report on Startup Outlook. The report looks at how startups feel about 2020 vs 2019 (below). We continue to be optimistic as founders - especially as we look to hiring in 2020 with 67% believing conditions will be better this year than last year. 79% of us expect to hire more staff this year up from 77% in 2019. One thing you can say about founders is we’re always optimistic! That’s what makes us who we are.
The survey covers US, Canadia, UK and Chinese CEOs/Founders which saw the greatest differential between location and exit type.
  • US, UK and Canadian view their primary exits as M&A (58% & 60%)
  • Chinese founders view IPO as 46% with M&A at 14%
Remaining private and not disclosing exit options fill out the remaining percentages.
SPACs, Special Purpose Acquisition Companies and Direct Listing also look to be on the increase in 2020. SPACs are blank check companies with no operations that can merge into the Public Holding Company. This is significantly different than the “Reverse Merger and Shell” corp model that some third tier banks will try to push onto founders.
The Direct listing model was used by Slack and Spotify last year and this year look to be AirBnB and GitLab. Most of these deal structures are for very late stage companies.
How do you see your Ultimate Exit?

Where have all the mergers gone?
  • There was only $164 billion of announced global M&A in January, the slowest start to a year since 2013, per Refinitiv.
  • This comes off a 2019 in which volume was down slightly from 2018, but still the fourth-largest dollar volume in history and sixth-straight year above $3 trillion.   •   Share

Unhappy with the performance of large initial public offerings in recent years, private equity will increasingly seek alternative exits for its startup investments in 2020.

Confessions of an Entrepreneur: From $105,000 in debt to selling my company for $16.5m by 25.
Techstars Startup Digest Prepping for Exit - a Founder’s Perspective on M&A is curated by:
Dave Parker Dave Parker
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