Good morning 👋
A recurring theme you’ve heard from us is that everybody in startup-land is looking for liquidity.
Last week it got some with the Truework // Checkr acquisition, and the TBPN guys had them on to talk about where they think the future of M&A is going.
They had some interesting thoughts that we’ll break down for you …
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Today’s highlights
The future of M&A
Techstars wants to mirror YC
A 10-year look at building a startup
How language compresses itself
TOP
where M&A is going 👇
Last week, Truework got acquired by Checkr, and both CEOs hopped on TBPN to talk about it.
Everybody in the venture world is still worried about the lack of exits, and we’ve written in depth about some of the second-order effects of an extended lack of liquidity.
Ryan and Daniel have a few different thoughts, and here is where they see the most opportunity for the future of M&A:
Road to IPO is longer, and the bar to go public is higher than ever. That means fewer companies going public at a time when GPs and LPs are both pressured to create more liquidity.
The new revenue target: $1b in revenue with diversified revenue sources, strong growth, and profitability.
More M&A for small and medium-sized businesses to join forces. This funnels down to more acqui-hires and smaller M&A to grow revenue via acquisition instead of expansion.
A handful of companies will still pursue the IPO path.
Those companies will aggressively acquire competitive businesses to grow their customer base, revenue, and growth trajectory.
This creates a larger pool of startup buyers, however, venture math doesn’t love reward these smaller outcomes as we wrote about last week.
It will be interesting to see how this all plays out in the current environment, but it’s something we’ll continue to monitor.
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TWEET
HEADLINES
Techstars increases startup funding to $220,000, mirroring YC structure (TechCrunch)
Making sense of venture capital's AI paradox (Axios)
Former Y Combinator president Geoff Ralston launches new AI ‘safety’ fund (TechCrunch)
Elite university endowments confront a ‘parade of horribles’ (Pitchbook)
COMMUNITY
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Here’s a list of things tier-one investors have access to:
Good background knowledge and an understanding of how venture dynamics work
A source of good deal flow so that you see founders first
An elite investor network that you can share notes, deals, and other information with
Mental frameworks to understand company building, scale, and what makes a good vs. great investment
Connections to other high-quality people that become future co-workers or portfolio company employees
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2,500 other investors from places like Bessemer, Insight, Accel, and Founders Fund already use it, and we think you should too.
LINKS
🤗 Finding Language-Market Fit—How to Make Customers Feel Like You’ve Read Their Minds: Matt Lerner, co-founder and CEO at Startup Core Strengths, shares his advice on how critical getting the exact language right can yield jaw-dropping differences in conversion
🏌 McIlroy’s Portfolio: How Rory McIlroy build his business beyond the green
🔟 What Building a Startup Really Looks Like—A Brutally Honest 10-Year Map: The journey of what the next decade might actually look like for a startup founder
👂 How to Make Investors Actually Use Data & AI Products: Insights from Accel CPO Rahul Nath on driving tech adoption in VC (hint: it’s not about building more tools—it starts with understanding your customer)
🤹♂️ Traction = Distraction: Distraction isn’t a flaw in the system, it’s a byproduct of traction
POLL
What do you expect the next 3-4 years of startup M&A to look like?
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- Clay
(Founder @ Confluence.VC | GP @ Outlaw)
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