Description

In this episode, we discuss the prediction that M&A activity among fast-growing SaaS companies will rise substantially in 2024. In support of this prediction, we share both data and reasoning for this prediction, including startup acquisition activity, shutdown and funding trends, and a broader market view of M&A activity. We also offer advice to founders considering M&A in 2024, emphasizing the importance of preparation and developing decision-making criteria in advance of contemplating M&A.

Discussion Topics

• M&A activity among SaaS companies is predicted to increase in 2024.
• Startup acquisitions have been observed to increase since 2019, but there was a slight decrease in 2023 and why 2024 could be different.
• How startup shutdown activity and cash runway inform the prediction of heightened M&A activity.
• It can take founders & CEO’s several months to reach the conclusion to shut down a SaaS business, the faster one reaches that conclusion, the better when it comes to exploring acquisition options.
• A broader view on M&A activity in the market based on data recently shared by Pitchbook. Hint B2B M&A is stable!
• How SaaS companies that may be considering M&A should contemplate and prepare for possible M&A.

Highlights

[00:00] Introduction to M&A activity prediction in 2024

[03:09] Startup M&A activity since 2019

[04:59] Significant increase in startup shutdowns and timing

[06:27] 57% of Startups will run out of cash in less than 18 months

[09:29] Cash is defensibility: don’t wait until the last minute to decide to sell or shutdown

[11:57] M&A activity more broadly with insights from Pitchbook

[15:21] Advice for startup founders and CEOs considering M&A in 2024

Connect with Christian & In/organic Podcast

Christian's LinkedIn: https://www.linkedin.com/in/hassold/

In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcast

In/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featured

Data Referenced in this Episode

Clouded Judgement: https://cloudedjudgement.substack.com/p/clouded-judgement-12123-net-new-arr

Pitchbook: https://files.pitchbook.com/website/files/pdf/Q4_2023_PitchBook_Analyst_Note_Increased_Antitrust_Scrutiny_and_Complexity_for_MA.pdf

Carta/Peter Walker: https://www.linkedin.com/posts/peterjameswalker_cartadata-startups-founders-activity-7112949181815656448-06cy/ (Carta)

SaaStr: https://www.saastr.com/pilot-57-of-venture-startups-will-need-to-raise-more-in-2024/

Carta: https://carta.com/blog/mergers-acquisitions-outlook-2024/ 

Hosted on Acast. See acast.com/privacy for more information.