Helluva Lifestyle Business You Got There
Unicorns and venture capital go hand in horn. Or so the story goes.
Have a billion dollar idea, raise a little bit of money, show a little traction, raise a lot more money.
You can’t compete with out it! They say.
You can’t scale without it! They say.
Weaponized balance sheets have become the competitive strategy of this anabolic age.
Anything less makes for a less ambitious business owner running a “nice little lifestyle business”
But there’s an interesting trend brewing.
If you look at the last 6mo. of $1B +/- tech exits, you’ll notice something peculiar.
Of the 9 exits in that range there are 2 IPOs (The Trading Desk and Nutanix) and 7 M&A transactions.
4 of those M&A transactions are what you’d expect:
- AppDynamics acquired for $3.7B ($314M raised from from VCs)
- Jet.com acquired for $3.3B ($565M raised from VCs)
- Square Trade acquired for $1.4B ($248M raised from VCs)
- Merkle acquired for $1.5B ($124M raised from VCs)
Then there are 3 that look very different:
- AppLovin acquired for $1.4B ($4M raised from friends and family)
- Media.net acquired for $900M (no investment from VCs)
- Outfit7 acquired for $1B (no investment from VCs)
Over time, ambitious founders have been trained that billion dollar exits are reserved only for those who follow a very defined playbook for blitzscaling a business. Yet, 3 of the 9 tech exits in the billion dollar range in the last 6mo. were not VC backed.
The biggest disruptive threat to venture capital is not crowdfunding or Angel List or hedge funds.
The biggest disruptive threat to venture capital is when the very best founders realize they need very little of it to scale.
Given the energy and focus we are putting behind Indie.vc, we anticipate that this trend will not only grow, but accelerate.
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