Tech M&A Report $0 to $100M
Jacob Mullins
CEO & Founder, Exitround
@jacob
!
June 2014
Global M&A is
on FIRE
2014
• 33% increase to $599Bn, ’13
• Most active start since 2011
• TMT M&A highest share of Global
...
Overall Tech
M&A
Landscape
• Mega-deals are < 1% by volume
< 1% deals 88% deals
*Source: Mergermarket M&A Trend Report: Q1...
Exitround: 

The Exit Curve
• More money does not equal higher exit
• Best return on capital: $2-3M & $5-10M raise
• Consu...
More capital ≠
Larger exit
• Co’s that raised $5M - $10M had
larger exits than raised $10 - $50M
• Co’s that raised $3M - ...
The New
Venture/Seed
Investing
Landscape
• Seed investors can make solid return if invest
early at low valuations
• Among ...
Exit Sizes that
Generate Best
Returns
• Exit of $3M - $7M where returns increase
• Exits of <$2M tend to lose money
• On e...
Exits w Highest
Multiple ROI
• Multiples on total cash invested:
• Average = 13.6x
• Median = 5.0x
• Exits w highest multi...
Length of Time
to Build
Successful Co
Significant exit value increase
after company is 4 years old
*Source: Exitround “The ...
Exiting under $100M
• Best exits from ROI perspective are raises $2M - $3M &
$5M - $10M
• 88% of all technology M&A happen...
exitround.com/data


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Exitround Tech M&A Report $0 to $100M - Orange Fab Demo Day S2 - June 2014

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A visual slide representation of some of the content from Exitround's Tech M&A Report from $0 to $100M, focusing on the "long-tail" of tech M&A. This was presented at Orange Fab's Demo Day for Season 2 companies in San Francisco.

Exitround Tech M&A Report $0 to $100M - Orange Fab Demo Day S2 - June 2014

  1. 1. Tech M&A Report $0 to $100M Jacob Mullins CEO & Founder, Exitround @jacob ! June 2014
  2. 2. Global M&A is on FIRE 2014 • 33% increase to $599Bn, ’13 • Most active start since 2011 • TMT M&A highest share of Global M&A since 2006 • Technology, highest value on opening qtr by 55% increase, ‘13 *Source: Mergermarket M&A Trend Report: Q1 2014 (link)
  3. 3. Overall Tech M&A Landscape • Mega-deals are < 1% by volume < 1% deals 88% deals *Source: Mergermarket M&A Trend Report: Q1 2014
 **Source: Woodside Capital Partners “MASiV 2014: The M&A Silicon Valley Gathering Report” • 88% of all deals are below $100M Doesn’t mean you can’t make money, in fact…
  4. 4. Exitround: 
 The Exit Curve • More money does not equal higher exit • Best return on capital: $2-3M & $5-10M raise • Consumer ROI: 9.1x average | 4.8x median • Enterprise ROI: 21.1x average | 7.5x median *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data exitround.com/data
  5. 5. More capital ≠ Larger exit • Co’s that raised $5M - $10M had larger exits than raised $10 - $50M • Co’s that raised $3M - $5M had lower exits than those raised $1M - $3M *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  6. 6. The New Venture/Seed Investing Landscape • Seed investors can make solid return if invest early at low valuations • Among all companies, capital raised: • $3.4M average • $1.03M median • 56.8% of exits (sub-$100M) are <$5M • Most lucrative exits: • $3M - $5M (17% of total) • $10M - $20M (11% of total) *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  7. 7. Exit Sizes that Generate Best Returns • Exit of $3M - $7M where returns increase • Exits of <$2M tend to lose money • On exits of $3M - $7M & $10M - $20M avg dollar raised = $1M • Same capital required to get $3M or $20M exit *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  8. 8. Exits w Highest Multiple ROI • Multiples on total cash invested: • Average = 13.6x • Median = 5.0x • Exits w highest multiples: • $3M - $4M • $6M - $7M • $30M +*Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  9. 9. Length of Time to Build Successful Co Significant exit value increase after company is 4 years old *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  10. 10. Exiting under $100M • Best exits from ROI perspective are raises $2M - $3M & $5M - $10M • 88% of all technology M&A happens under $100M • 56.8% of early tech M&A happens under $5M • Enterprise co’s have better returns by factor of 3x • Significant increase in value after 4 years • Full report at exitround.com/data *Source: Exitround “The Exit Curve: Exitround’s Report On Tech M&A” 2014; exitround.com/data
  11. 11. exitround.com/data 
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