Moreover, many of today’s startups are actually being acquired by PE portfolio companies, which changes the discussion a bit. Add-ons (akin to strategic acquisitions in this case) are popular in the software space as sponsors continue strengthening their platform investments with additional revenue lines. That said, we wouldn’t be surprised to see startups become more popular platform investments in the years ahead, especially late-stage companies that have been private for almost a decade. As PE gains experience in software, the idea of startup buyouts (to coin a phrase) may not sound as crazy as it does today.
This column originally appeared in The Lead Left.
Read more about PE deals for VC-backed startups in our 2017 Annual VC Liquidity Report.