So if you’ve built a solid cash generating business, but no longer feel motivated to stick around, PE firms can be a great fit. They may want to put in their own management. In fact, in some cases they may prefer that you don’t. However, PE firms often don’t care whether you stay or not. When you sell to a big company, they often want you to stay, so they’ll structure the deal so that your payout is distributed over time. In September 2018, they announced their landmark sale of Marketo to Adobe for $4.75 billion, making $3 billion in just two years – their largest realized profit from a single company.įrom a founder’s perspective, there are also some advantages to selling to a PE firm. Vista in particular has done well with this strategy. There are PE funds now, such as Vista Equity Partners and Think3, that focus exclusively on SaaS. And since the SaaS market has grown over the last 2 decades, there are plenty of companies that have predictable revenues but are not growing at VC expectations.Īs a result, the number of US PE deals in SaaS increased by about 217% between 20 according to PitchBook.
#Think3 capital how to
Since their businesses are subscription based and their metrics are well-defined, PE firms know how to model their returns fairly well now. PE folks in the US have begun to develop an appetite for SaaS because it is predictable and easy to understand. But that is changing, particularly in the world of Software-as-a-Service (SaaS). PE people wear suits and VC people wear jeans. Up until now, these worlds rarely collided. PE looks for untapped value, while VC looks for growth. PE is the larger asset class within private investment world that focuses on finding established but underperforming companies, acquiring controlling stakes, and turning them around.
However, there is a third option emerging, and that is selling to a private equity firm.įor those that are unfamiliar with private equity (PE), it is essentially the bigger brother of venture capital (VC). When venture capitalists think about exits, they often think about 1) selling to a corporate or 2) going public. One trend that has hit the US but not Japan is private equity’s entrance into the startup world.
0 kommentar(er)
