Acquirers // are shaking up VC by bridging private and public markets
Investors are creating acquisition funds to buy out startups that have been overlooked or rejected by traditional VCs. These “acquirers” target profitable, scalable companies that don’t need more funding.
Acquirers offer an alternative exit without an IPO or trade sale. They claim to provide more flexibility and alignment to founders compared to VCs.
Acquirers can support diverse founders neglected by VCs. They also aim to create more social impact in areas beyond software and biotech.
Acquirers have become more prominent, with over 2,200 VC-backed acquisitions in 2020. Top acquirers include Thomma Bravo, Vista Equity and Insight Partners.
Examples of successful acquisitions include Mailchimp, Wrike and Calendly — profitable companies that raised little or no VC funding.
Acquirers provide an exit option but also compete with VCs for deals and talent. They disrupt power dynamics between investors and founders.
SPACs allow acquirers to go public faster to buy startups. They offer advantages like higher valuations and access to capital.
But SPACs come with risks like finding a target quickly and competing with other SPACs. Startups also face more scrutiny as public companies.
Acquirers shake up venture capital by bridging private and public markets. But SPACs have tradeoffs to weigh for both acquirers and targets.
The rise of acquirers and the use of SPACs to buy startups represents a shift in the startup financing landscape, though SPACs also come with some risks and tradeoffs. Overall, acquirers are shaking up VC by bridging private and public markets and catering to different types of startups.
