‘This is the year that the shit’s hitting the fan because you can only extend runway so much, and it doesn’t mean much if you’re not growing.’ – Ed Sim
Ed Sim (Founder and Managing Partner at Boldstart Ventures) and Jamin Ball (a Partner at Altimeter Capital) explore the dynamics of M&A markets, prerequisites for an IPO in 2024, and the impact of venture capital investments on these processes.
They shed light on current trends in seed and series A investments, the challenges posed by inflated valuations, and the influence of market conditions on strategic decisions.
Table of Contents
- Dynamics of Late-stage Investments
- Threefold Criteria for Going Public
- Fluctuating Venture Capital Investment Trends
- The Pitfall of Inflated Valuations
- Implications of High Inception Rounds
Dynamics of Late-stage Investments
Late-stage investors are seeking to recoup their investments for reinvestment or redistribution to LPs. This trend could potentially affect M&A markets as regulatory constraints may make large-scale mergers and acquisitions more challenging.
Threefold Criteria for Going Public
For a company to go public, three key criteria must be met: achieving cash flow break-even status, demonstrating high growth (30%+), and moving towards a rule of 40 or 50 with more emphasis on growth than cash flow break-even.