• Triton

Silicon Valley Startups Favor IPOs Over Deals as M&A Languishes - Bloomberg

Updated: Jun 14, 2018

When it comes to choosing an exit, some closely held technology companies are betting they can get richer valuations from a public listing than from being acquired.

Until recently, startups could count on generous private funding, with the associated generous implied valuations, and avoid the perceived hassle of being accountable to public investors. If a company had both exit options on the table — an IPO or an outright sale — the sale option looked attractive.

At the moment, their faith is in the public markets, where they are betting valuations will be more generous over time than what an acquirer would be willing to pay. For private targets, that means an IPO. For public targets, it’s in their best interests to stay independent.

“An M&A buyer would have to buy the whole company and fund the losses,” said Rett Wallace, chief executive officer at Triton Research Inc., which analyzes Silicon Valley companies preparing to go public. “An IPO would be preferable to having the screws put to you by a buyer.”

Full article on Bloomberg - HERE