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Why would you make technical decisions based on what hyponthenictal new owners would prefer in a hyponthenictal acquisition in 5 years?

iainctduncan 6y ago
Because that's how founders make money. The vast majority of exits now are purchases by private equity firms, and they will do a thorough technical due diligence and look at those decisions and what it will take to run the company the way they want to. (I do those diligences for a living) If you're doing a tiny lifestyle company with no exit plan, you wouldn't. Which ironically, is exactly what I'm doing on my own time, so I use Scheme for that. :-)
- fsloth 6y ago
  Most exits are purchases by private equity? I had no idea - are there any references for that available?
  - iainctduncan 6y ago
    Here's one report I used for a presentation. The quote of interest: "Over the last 12 months, 75 per cent of the most active “buyers” of $100m+ technology companies have been PE firms. This is despite the fact that the combined cash balances of the “Big Five” tech companies is an eye-watering $330 billion. Today’s most active tech buyers are private equity firms like Silver Lake, Francisco Partners, and Vista Equity. Not Google, Facebook or Amazon." https://ftalphaville.ft.com/2019/01/07/1546862666000/Guest-post--Private-equity---tech-s-best-kept-secret/ https://ftalphaville.ft.com/2019/01/07/1546862666000/Guest-p... One of the things that is not obvious to people coming from the VC world is that once the company has gone from VC to PE, it's likely going to get flipped several more times from PE to PE. At a guess, I'd say 3/4 of what I look at are one PE to another. Depending on the firm, they will sell every 3 to 7 years or so. iain
michaelpb 6y ago
What's "hyponthenictal"? You used it twice, but it's not on Google...
- The_Amp_Walrus 6y ago
  It's a misspelling of "hypothetical"

iainctduncan 6y ago

Because that's how founders make money. The vast majority of exits now are purchases by private equity firms, and they will do a thorough technical due diligence and look at those decisions and what it will take to run the company the way they want to. (I do those diligences for a living) If you're doing a tiny lifestyle company with no exit plan, you wouldn't. Which ironically, is exactly what I'm doing on my own time, so I use Scheme for that. :-)

fsloth 6y ago
Most exits are purchases by private equity? I had no idea - are there any references for that available?
- iainctduncan 6y ago
  Here's one report I used for a presentation. The quote of interest: "Over the last 12 months, 75 per cent of the most active “buyers” of $100m+ technology companies have been PE firms. This is despite the fact that the combined cash balances of the “Big Five” tech companies is an eye-watering $330 billion. Today’s most active tech buyers are private equity firms like Silver Lake, Francisco Partners, and Vista Equity. Not Google, Facebook or Amazon." https://ftalphaville.ft.com/2019/01/07/1546862666000/Guest-post--Private-equity---tech-s-best-kept-secret/ https://ftalphaville.ft.com/2019/01/07/1546862666000/Guest-p... One of the things that is not obvious to people coming from the VC world is that once the company has gone from VC to PE, it's likely going to get flipped several more times from PE to PE. At a guess, I'd say 3/4 of what I look at are one PE to another. Depending on the firm, they will sell every 3 to 7 years or so. iain

michaelpb 6y ago

What's "hyponthenictal"? You used it twice, but it's not on Google...

The_Amp_Walrus 6y ago
It's a misspelling of "hypothetical"