– For Tech Startups, Raising Less Cash Often Pays Off, Study Says

HAPPY Fourth Of July All

Before you go all-in on your idea, make sure you’ve thought about an exit. Generally, “living under a bridge” should be one, but not THE one. With the blog post below (at the WSJ), you might consider a “quality” option, and not a “growth” option. In general, it’s easier to get people working together for “quality”, but sometimes investors want “growth”. In the end, the market will decide. fireworks_via_flicker

For Tech Startups, Raising Less Cash Often Pays Off, Study Says

Technology startups raising a couple of million dollars often command a higher exit price than those raising more than twice as much, a new study says.




The (study) analyzed exits from 2006 to 2014 using proprietary data for more than 200 acquired companies provided by investors and startup incubators. It examined exits of less than $100 million, the price range for 88% of technology M&A, according to industry data. The report is significant because acquisition prices in this range often are not publicly reported. (…)




Companies selling to other businesses, or enterprises, tended to do better than consumer companies. The median return was 7.5 times for enterprise companies versus 4.8 times for consumer ones.


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