Surepath Capital founder Mark MacLeod discusses Canadian case studies involving exits and what companies can do to achieve one.

1. D E S I G N I N G Y O U R E X I T S T R AT E G Y :
A D ATA - D R I V E N L O O K AT R E C E N T S A A S E X I T S

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A g e n d a
Introduction
Canadian SaaS Exit Trends
Case Studies
How to achieve your exit?
Introducing ‘Real Exits’
01
02
03
04
05

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I n t r o d u c t i o n
M A R K M A C L E O D
F O U N D E R & P R E S I D E N T
S U R E PAT H C A P I TA L PA R T N E R S
Mark has over 14 years experience as a CFO for leading companies such as FreshBooks,
Shopify, Tungle and many others. He also spent 3 years as a General Partner at Real Ventures,
Canada’s largest and most active seed stage venture fund.
He has raised hundreds of millions in capital from investors in Canada, the US and Asia. In
addition, Mark has sold companies to Airbnb, Blackberry, Rackable Systems, Return Path and
others.

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S u r e P a t h : O u r P u r p o s e
Helping you fund, grow and exit your startup
The process of raising growth capital is very different from raising early stage capital
It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your
aspiration, you need growth capital
We help startups prepare for growth stage and help them raise the capital needed to become market leaders
We have sat on both sides of the table. We have funded, grown and exited many companies
We offer up that experience through ongoing coaching and mentoring.
A low touch, high impact way to help you grow
There are few credible choices for advisors to facilitate sub $100M exits. We fill that gap
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
If you decide to exit, we manage the process for you from start to finish
SurePath maximizes your optionality:
We make sure you know what it takes to build a market leader and capitalize you towards that goal.
We ensure you are always in the minds of strategic buyers so that if they decide to make a move in your
space, you are in the conversation. You can then decide; Keep going or exit?
Growth
Funding
Strategic
Guidance
Exits

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S u r e P a t h & S M B
•We have been part of some the most successful SMB SaaS companies
•We have deep relationships with SMB investors and buyers
•SurePath is committed to becoming the leading strategic financial advisor to the global
SMB software market

6. Canadian SaaS Acquisition
Activity

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E x i t s b y T y p e
Source: pitchbook.com
7
3
13
10
7
13
7
12
9
4
3
1 1
2
4
6
8
10
12
14
2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4
NumerofDeals
Canadian SaaS Exits
Merger/Acquisition IPO

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B u y e r L o c a t i o n & T y p e
Source: pitchbook.com
USA
53%
Canada
32%
Europe
8%
Other
7%
Buyer by Geography
Public Buyers
40%
Private Buyers
60%
Buyer by Type

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B u y e r s
Who’s buying Canadian SaaS companies
Source: pitchbook.com

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E x i t s b y A g e
Source: pitchbook.com
33%
22%
28%
11%
6%
Time to Exit
0 to 5 Years
6 to 10 Years
11 to 15 Years
15 to 20 Years
> 20 Years

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E x i t s b y S i z e
Source: pitchbook.com
10%
7%
2%
2%
3%
76%
Exit Values
$0-$10M
$10-50M
$50-$100M
$100-$200M
$200M +
Non-disclosed

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F u n d i n g S t a t u s
Source: pitchbook.com
3%
55%
42%
Funding Status of Exited
Companies
PE VC Non-funded
$259.4m
$33.1m $2.5m
$0.0m
$50.0m
$100.0m
$150.0m
$200.0m
$250.0m
$300.0m
PE VC Non-funded
Median Valuation
4.0x
5.3x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
PE VC
Valuation /Rev Multiple

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P R O V I N C E E X I T S
O N TA R I O 4 7
B R I T I S H C O L U M B I A 1 9
Q U E B E C 1 6
N O VA S C O T I A 3
A L B E R TA 2
N E W B R U N S W I C K 2
P R I N C E E D WA R D I S L A N D 1
E x i t s b y L o c a t i o n
3
1 9
4 7
1
1 6
2
2

14. Case Studies

15. Private & Confidential |
Compilr
Year Founded 2010
Time To Exit 4 Years
Rounds Raised 1
Total Funding $110K
Investor(s) Seedcamp
Headquarters
Halifax,
Nova Scotia
Employees 12
15
C a s e S t u d y : C o m p i l r
Source: pitchbook.com, Entrevestor, Techcrunch, Financial Post, Techvibes
Acquired By Valuation Date Of Acquisition
$20M USD*
*Estimated
Oct 2014
• Compilr tried to raise capital and was rejected by 35 VCs
• They were profitability driven - focused on improving ARPU from
existing clients as opposed to growing via freemium
• Acquisition allowed lynda.com to grow its reach with
developers and allowed cloud-based platform to create code
• lynda.com was an inbound acquirer, reaching out in 2013 to
buy Compilr
• Founders started looking for acquirers a year before acquisition
• CEO Patrick Hankinson took the lynda.com offer and reached
out to every education platform competitor to shop around
• After a year, lynda.com shuttered the technology and got rid of
the Compilr team, CEO regrets not digging deeper

16. Private & Confidential |
Universe
Year Founded 2011
Time To Exit 4 Years
Rounds Raised 3
Total Funding
$2.2M
($250K Debt)
Investor(s) Real Ventures
Headquarters Toronto, Ontario
Employees 33
16
C a s e S t u d y : U n i v e r s e
Source: pitchbook.com, Techvibes, angel.co, hypebot
Acquired By Valuation Date Of Acquisition
Not Disclosed June 2015
• Universe had a clear buyer from the outset - they garnered
the attention of Ticketmaster when they raised their round in
May 2014 and were acquired a year later
• Universe had an important differentiating factor - users did
not have to travel to another website in order to buy tickets
which created a better user experience
• Acquisition allowed Ticketmaster enter the DIY ticketing
market
• They used an M & A advisor on the deal
• Universe is currently operating independently - they have
doubled headcount and opened offices in NY and London
since being acquired

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Monexa Services
Year Founded 1998
Time To Exit 17 Years
Rounds Raised 2
Total Funding $6.23M
Investor(s)
Ansera Capital
Partners, PenderFund,
Yaletown Partners
Headquarters
Vancouver,
British Columbia
Employees 51
17
C a s e S t u d y : M o n e x a S e r v i c e s
Source: pitchbook.com, Finsmes, Newswire, BCTechnology
Acquired By Valuation Date Of Acquisition
$33.1 Million USD August 2015
• Monexa’s subscription commerce platform allowed
businesses to manage complex product and services billing
requirements - capabilities that Netsuite did not have and
would have been costly to build
• Monexa leveraged its market leadership to raise funding to
rapidly iterate upon its existing product to be able to
outcompete new SaaS companies entering the space
• Netsuite acquired Monexa because they needed an agile
billing system in order to compete and their existing
product was insufficient
• Netsuite retained all employees and Vancouver was made
the centre of Netsuite’s subscription billing efforts

18. How to Achieve Your Exit

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Exit Rule #1: Be proactive
stop
wishing.
start
doing.

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Exit Rule #2: Strangers don’t (often) marry

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Exit Rule #3: Timing matters
Source: SaaStr

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Exit rule #4: (Almost) anything is possible
Possibilities

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Buyer Types
Founder
✓ Product-driven
✓ Based on desire
✓ Top down
✓ No prior relationship needed
Manager
✓ Fact-driven
✓ Based on clear business case
✓ Pushed up to CEO
✓ Need evidence (joint customers)

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Drivers of Deal Value
✓ Alternatives (runway, competition)
✓ Scarcity
✓ Mortal enemies
✓ Growth (fear)
✓ Market leadership (2 way)
✓ Does the buyer’s CEO Want this?
✓ On strategy
✓ Currency
✓ Time and timing (including markets)

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T h e R o l e o f A d v i s o r s
25
✓ Should you hire one? Yes
✓ What to look for: Relevant relationships, completed deals and expertise.
Senior people involved
✓ Role:
✓ Prepare you
✓ Quarterback
✓ Create / manage demand
✓ Good cop/ bad cop
✓ Objectivity
✓ Create urgency

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I n t r o d u c i n g R e a l E x i t s

27. Shubham Datta
Associate
shubham@surepathcapital.com
647.972.6834
Rena Wang
Analyst
rena@surepathcapital.com
416.897.8922
Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004