Tom Tunguz

AUGUST 7, 2022

Zendesk & Anaplan announced their acquisitions within days of each other & their multiples bound the outer edges of the range: 5.1x & 13.4x. The more free cash the company produces, the lower the acquisition multiple. Curiously, free-cash flow margin correlates to forward-revenue/EV multiples at -0.996.

Acquisition 324

Acquisition Pricing Startup Software 324

Tom Tunguz

MARCH 8, 2022

Startups create products. When a business is ready to scale, a startup ought to develop an organizational roadmap. Managers of paid acquisition, organic acquisition, and marketing operations/systems report to the head of demand generation. The question for early-stage startups is how to start building this structure.

Startup 361

Startup Acquisition Product Marketing Scaling 361

Tom Tunguz

DECEMBER 11, 2022

The acquisition is notable for three reasons. Third, it’s the most substantive acquisition to announce this year after Figma’s announced its sale to Adobe. Coupa’s sale continues a trend of private equity buying venture backed startups , a result of record PE fundraising & depressed multiples. NTM revenues.

Acquisition 250

Acquisition Startup Software Pricing 250

SaaStr

AUGUST 19, 2020

Q: Which merger and acquisition trends, if any, do you expect to unfold in the next 12 months? Not some tiny startup that might take years to get to material revenue or market share. If you are worth $20b-$1T+, you often don’t want to wait for a small acquisition or internal initiative to bear fruit. You buy that growth.

Acquisition 341

Acquisition Cloud SaaS Pricing 341

Tom Tunguz

JANUARY 15, 2023

“The Startup M&A Market Fell 94% Year over Year - But One Segment Thrives” , a post from last week, elicited the same question from many readers. I reviewed the roughly 560 US software acquisitions under $400m since January 1, 2020. ServiceNow tops the list with 5 acquisitions. Number of Acquisitions.

Acquisition 290

Acquisition Software Review Software Startup 290

SaaStr

NOVEMBER 24, 2023

Dear SaaStr: How Hard is it For a Startup founder/CEO to Settle Into a non-CEO Role After an Acquisition? A bit more here: What are some general tips for conduct during acquisition talks? The post Dear SaaStr: How Hard is it For a Startup founder/CEO to Settle Into a non-CEO Role After an Acquisition?

Acquisition 299

Acquisition Startup Engagement Leadership 299

SaaStr

APRIL 13, 2025

Don’t try to evolve into a compound startup later – Unlike conventional wisdom about starting focused and expanding, Conrad believes it’s “really hard” to transition from a point solution to a compound startup: “You kind of have to almost refound the company.” The advantages are substantial: 1.

Startup 163

Startup Sales Hiring Underperforming Technical Team Cloud 163

Tom Tunguz

FEBRUARY 25, 2023

Similar questions have surrounded Microsoft’s acquisition of Blizzard; The US Department of Justice seeks to unwind the Google/DoubleClick merger ; British regulatory bodies forced Facebook to reverse its Giphy acquisition. Startups evaluating M&A have additional factors to consider. Who is granting options?

Acquisition 223

Acquisition Startup Government Technical Review 223

SaaStr

MAY 25, 2023

Probably just say Yes pic.twitter.com/K483lKnyzd — Jason ✨Be Kind✨ Lemkin  (@jasonlk) April 21, 2021 So I wrote a version of this post years ago, about when to think about selling your startup, if you do get an attractive offer. Every Big Tech company has a budget for sub-$100m acquisitions. 2 turned down an $80m offer on $2.5m

Acquisition 361

Acquisition Venture Capital Scale Generative AI 361

SaaStr

AUGUST 31, 2021

Q: When should a CEO walk away from an acquisition? I’ve walked from acquisitions where I, to be honest, did want the money but still walked. You have (at least) 4 constituencies in an acquisition: You and your co-founders. A little more here: When Should You Sell Your Startup? I’ve thought about this a lot.

Acquisition 326

Acquisition Pricing Cloud Startup 326

Tom Tunguz

JUNE 11, 2019

Let’s put this acquisition in context. First, it’s the third business intelligence related acquisition in the past month. Google announced the Looker acquisition last week. in acquisitions suggests that 2019 will be similarly active as 2018, which saw $66B of acquisitions. in revenue, growing at 29%.

Acquisition 271

Acquisition Pricing Startup Software 271

SaaStr

OCTOBER 25, 2024

Tomasz Tunguz , General Partner at Theory Ventures, shares nine observations from a Go-To-Market survey Theory Ventures did with hundreds of startups, 68% of them early-stage, well-funded, mostly mid-market ACV, and 25% remote. Six months ago, security was the number one prohibition preventing businesses and software companies from buying AI.

Venture Capital 334

Venture Capital Marketing AI SaaS 334

SaaStr

SEPTEMBER 18, 2024

Dear SaaStr: We’ve Gotten a Good But Not Great Acquisition Offer. Should you sell your startup if you get a good M&A offer? The post Dear SaaStr: We’ve Gotten a Good But Not Great Acquisition Offer. Should I Take It? I’ve seen a second good one just never come again, or come too late, too many times.

Acquisition 307

Acquisition Startup SaaS 307

SaaStr

NOVEMBER 3, 2020

The other day Coupa did its first $1B+ acquisition, of 18+ year old Llamsoft. There should be a lot more billion+ acquisitions in Cloud and SaaS, if only because there are more decacorns to buy them. They all can buy something, or really several startups like Twilio has, for $1B+ now : So how long does it take?

Acquisition 329

Acquisition SaaS Cloud Startup 329

SaaStr

SEPTEMBER 14, 2023

Because in the short-term, it often costs basically close to nothing to acquire a smaller startup with cash on hand, or do a corporate VC investment. So if Salesforce invests a few billion in AI startups, and those values at least don’t go down — there’s essentially no cost to Salesforce. What do I mean?

Acquisition 306

Acquisition Investment Headcount Banking 306

Tom Tunguz

SEPTEMBER 15, 2022

Not too long before the public market correction, high-growth startups routinely commanded 100x ARR multiples. Doesn’t this acquisition reset the market price despite this year’s 70% correction? While Adobe’s acquisition may set a high-water mark, it’s a single transaction. The answer is likely not.

Startup 355

Startup Acquisition Pricing Revenue 355

SaaStr

AUGUST 8, 2022

Dear SaaStr: How Long Does It Take the Average SaaS Startup to “Exit”? I took a look a little while back at how long it took the average SaaS company that was sold for $1B+ to get that acquisition. years (maybe the better metric): The fastest of the bunch was Divvy’s $2b+ acquisition by Bill 5 years after funding.

Startup 331

Startup SaaS Acquisition B2B 331

Tom Tunguz

FEBRUARY 26, 2025

Most startups play defense when discussing pricing with customers. Startups operate in newer markets where pricing standards haven’t been set. But throughout this turmoil, startups must adopt a process to craft a good pricing strategy, and re-evaluate prices periodically, at least once per year. AWS, Twilio, Heroku, etc.

SaaS Payments 283

SaaS Payments Pricing Strategy Scale 283

SaaStr

OCTOBER 16, 2022

Dear SaaStr: What Percentage of Startups That Are Acquired Remain Successful? Salesforce grew Mulesoft, ExactTarget, and so far, Slack and all grew well after their acquisitions. ZoomInfo , one of SaaS’s great recent IPOs, is really an acquisition story. The “ZoomInfo” product was an acquisition. Every week.

Startup 317

Startup Acquisition Cloud Engineering 317

Tom Tunguz

MAY 25, 2022

Yesterday, Broadcom announced it will acquire VMWare for $70b, the largest software acquisition in history. This merger also suggests a wave of acquisitions may punctuate 2022, in particular, take-privates. Public companies can’t hide from the 70% collapse in multiples the way startups can. before the acquisition.

Acquisition 250

Acquisition Software Enterprise Startup 250

SaaStr

MAY 6, 2024

This time, on Mergers & Acquisitions. My biggest take-away: there are barely more than 50 acquisitions of $50,000,000 or more, at least disclosed one, in software of U.S.-based based startups each year. And that’s fairly constant for the past decade, outside of the 2021 bubble. But M&A isn’t up.

Acquisition 290

Acquisition Software Review Software Cloud 290

Tom Tunguz

JANUARY 4, 2023

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. The total quantity of acquisitions demonstrated greater resilience shrinking by 56%, while the median acquisition value tumbled from $81m to $22m (-72%). It’s no surprise Q4 2022 acquisition value plummeted. in Q4 2022.

Startup 327

Startup Marketing Acquisition Technology 327

SaaStr

APRIL 5, 2025

Kobe Conrad, Head of Growth at Rupa Health and Onleet, took the stage at SaaStr Annual to break down the five growth channels that transformed Rupa Health from a $20M seed-stage startup into a platform with hundreds of millions in equity and a 4,000% increase in user acquisition over three and a half years.

Scale 229

Scale AI Search Sales Hiring Acquisition 229

SaaStr

AUGUST 16, 2024

Dear SaaStr: When Should You Sell Your Startup? The post Is Selling Your Startup “Good” or “Bad” For The Employees? But if the time has come to sell … if your experience and guy says it’s time … fight for them again. But don’t assume it’s not the journey for them. It might not be.

Startup 316

Startup CTO Leadership Acquisition 316

SaaStr

SEPTEMBER 14, 2023

Because in the short-term, it often costs basically close to nothing to acquire a smaller startup with cash on hand, or do a corporate VC investment. So if Salesforce invests a few billion in AI startups, and those values at least don’t go down — there’s essentially no cost to Salesforce. What do I mean?

Acquisition 264

Acquisition Investment Headcount Banking 264

Tom Tunguz

APRIL 16, 2020

Double down the investment in go to market, light up customer acquisition channels with marketing, pursue strategic acquisitions. If you’re lucky enough to be in the top right, you’re in the best position. Full speed ahead. Everything is on the table. It’s time for all-out offense.

Startup 351

Startup Strategy Venture Capital Acquisition 351

Tom Tunguz

JANUARY 18, 2023

Bundling of software justifies discounting, reducing the blended cost of customer acquisition & improving net-dollar retention which creates very large ACVs in the mid-market, not just the enterprise. Today, new startups have to compete with a cloud-native incumbency. Cost-cutting CFOs prefer consolidating spend on suites.

Startup 314

Startup Strategy Scale Cloud 314

SaaStr

MARCH 1, 2025

Billion acquisition of HashiCorp. About Dave McJannet: Dave McJannet is the CEO of HashiCorp, and led the company from early-stage to its successful IPO and $6B+ acquisition yb IBM. The best leaders have experience with both startups and scale to navigate the in-between. And it’s one of the first to be acquired!

Scale 187

Scale Systems Review Scaling Leadership 187

SaaStr

APRIL 20, 2024

Marketers should focus on the acquisition channels they’re best at, even if it’s not the perfect fit for the situation. Brand marketing helps sustain word-of-mouth growth, which is a key driver of customer acquisition. Product Marketing and Early-Stage Priorities Product marketing is not a priority for most startups.

Sales Hiring 307

Sales Hiring Startup Marketing Technical Review 307

SaaStr

MARCH 25, 2024

Dear SaaStr: How Would You Invest a 5 Million Dollar Payout From an Acquisition? He literally lost everything in his prior startup. The post Dear SaaStr: How Would You Invest a 5 Million Dollar Payout From an Acquisition? Bear in mind I’m not a CFA, CPA, or professional financial advisor. But I have been through it.

Acquisition 282

Acquisition Investment Startup Marketing 282

SaaStr

APRIL 12, 2024

Dear SaaStr: When You Sold Your Startup, What Were the Downsides? Most founders I know end up looking back after selling, IF the acquisition was a success, and almost universally feel like they should have made 2x as much. The post Dear SaaStr: When You Sold Your Startup, What Were the Downsides? Start with Challenge #1.

Startup 299

Startup Acquisition Business Strategy 299

Tom Tunguz

APRIL 1, 2019

In 2014, I published a post called Do Startup Require Less Capital to Succeed than 10 Years Ago ? Startups going public from 2006-2009 showed a median ROIC of 0.42. With more capital, startups can take more risk, explore more customer acquisition channels (some which may not work), develop more products and potentially grow faster.

Startup 279

Startup Software Review SaaS Acquisition 279

SaaStr

JANUARY 8, 2025

It was started in 2014 when founders Daniel and Jonathan were working together at a delivery startup and experienced firsthand how slow background checks were slowing down worker onboarding. The SMB sales team was incentivized purely on logo acquisition rather than revenue.

Revenue 300

Revenue Scale Sales Hiring Compensation 300

SaaStr

JANUARY 25, 2024

Dear SaaStr: What happens to employees after your startup gets acquired? for anything longer than a transition period, and either won’t agree to hire all of them, or will transition them out post-acquisition. The post Dear SaaStr: What Happens to Employees After Your Startup Gets Acquired? It varies — a lot.

Startup 279

Startup Sales Hiring Finance Acquisition 279

Tom Tunguz

NOVEMBER 18, 2019

Last week’s post on The Most Frequent Mishire in Startups generated the most comments on a post this year. Though the startup may have achieved product market fit, the company may not understand the fit. Over time, the startup’s growth demands a more specialized role. In particular, it was this section. Why is this?

Product Marketing 267

Product Marketing Startup Marketing Interviewing 267

SaaStr

OCTOBER 16, 2023

Dear SaaStr: Why Do Many Startup CEOs Quit After Their Companies Are Acquired? I left my first startup after 20 days, post-acquisition. Acquirers should recognize this and turn the CEOs into 50%-time consultants and “non-executive chairpeople” of their startups, until the help isn’t needed anymore. That can be tough.

Startup 299

Startup Consulting Acquisition Retention 299

SaaStr

APRIL 21, 2023

But perhaps not as much as you’d expect from a $1B+ acquisition. No, the real elite players have made investments so great that the startups themselves aren’t just worth billions, but the VCs’ own stakes are. Not Just Billion Dollar StartUps. Let’s take one example, The Trade Desk. Today it’s worth a stunning $30 Billion.

Startup 294

Startup Acquisition Investment Sales 294