Where have all the exits gone?
Startups are worthy investments for VCs because they hold the promise of an eventual exit — either up to the big leagues through an IPO or swallowed by another player in an acquisition.
The door to IPOs has been all but slammed shut over the past 18 months. So has M&A picked up the slack?
Not really.
Close to 150 companies on Carta were acquired in Q2 of 2024. That's just a smidge higher than Q4 2023 and effectively flat from Q1 2023.
Now if we had charted the Twitter/X chatter about M&A alongside actual transactions? Two very different lines. It seems as though many startups are looking more favorably towards an exit now that fundraising difficulties have persisted but the buyers ain't buyin yet.
Interesting to note that about half of M&A for startups involves pre-seed or seed companies. Acquihires and feature grabs are more common than major firm tie-ups. Personally I'm not holding out much hope for IPOs this year, which leaves this route as the only real path out for many.
If you're a founder considering a sale (or getting approached by a buyer), take a spin through our M&A Guide for Founders, free of charge.
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Peter Walker
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