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IPO market is Dead…but M&A is heating up!

Written by morrisjd1 on

From: marketinginsiliconvalley.blogspot.com

After the shocking doom and gloom of Sequoia’s presentation “RIP:Good Times” , many in Silicon Valley have been in shock. The IPO market is shutdown for the foreseeable future. Entrepreneur’s dreams of vast wealth have vaporized in the ensuing realization of the scope of the economic downturn. However, wily entrepreneurs are trying to make the best of it all and the good ones know a “win” on their record with little to no pocket money is far better than a “crash and burn” on their record.

Following the Bay Area Tech Wire and Venture Beat, there has been consistent news of acquisitions. Just a few from this week alone are:

Not only in Silicon Valley is M&A heating up. CNN’s recent deal list is two pages long from the last two weeks.

All the M&A activity should not be a big surprise for entrepreneurs. In “Startup exit planning: M&A or IPO”, the historical probability of IPO is small. In this market, IPO is nonexistent; therefore M&A, obtaining capital or shutdown are the only options today. Is your corporate/business development team chatting with the bigger fish in your market segment? If not, you are already behind. From my alumni sources, M&A teams are working around the clock in established corporations.

Are we see going to see a startup buying spree over the next couple quarters? Yes, I think so, but only the best startups will have a chance. The question entrepreneurs need to ask is who is Oracle, SAP, Cisco, NetApp, HP, Adobe, Google, eBay, Intel and other cash rich companies looking to acquire in the coming months?