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Interesting premise although I don't think this is playing out yet (my company tracks this data). That said, we do see lots of corporations entering the ventur
by asanwal 14y ago
Interesting premise although I don't think this is playing out yet (my company tracks this data). That said, we do see lots of corporations entering the venture ecosystem which is probably a precursor to what Gabriel is mentioning.
That said, I do think @antrod's point that Gabriel references is somewhat flawed if I'm understanding his point correctly.
For a public company doing an acqui-hire, dilution would likely not come into play as the amount being paid is probably small (for the acquirer) and so EPS (earnings per share) dilution doesn't really become a factor. Of course, if the deal is larger, it does, but then it's probably not an acqui-hire either.
In terms of valuing on a EBITDA multiple, that may be the case for some companies, but I wouldn't underestimate the power of feeling like they (big co) might be left out from a coming boom or be disrupted as motivation to pay a price that is not strictly based on a financial ratio. I used to work in a big co in a previous life, and if they believe it's a burning platform need, financial constraints can and will be overridden.