There has been an increase in number of startups in the technology sector. Is the market demand sufficient to sustain the number of startups? Do you think there will be market consolidation of startups by the bigger technology companies?
Hi @firstname.lastname@example.org — Yes, there are a lot of tech start ups and it is constantly growing. No, it is not sustainable from the standpoint of each start up being a long-term viable and independent business, and yes there will inevitably be consolidation within the industry. In fact, a large number of the entrepreneurs launch their businesses not with the intent that they will be long-term stand-alone entities but rather with the actual intent that they will be acquired, thus freeing them up to move on to their next creative adventure. Very few want to be the next Mark Zuckerberg, Bill Gates, Jack Dorsey, or Steve Jobs. Most would like to be the founders of Whatsapp, Jan Koum and Brian Acton, Instagram, Kevin Systrom, or CloudKnox, Balaji Parimi. But start ups are risky acquisitions in their own right and tech start ups are even riskier for a variety of reasons. Due diligence is critical, and not just the financial due diligence but also (perhaps most especially) the human capital due diligence, so there will be an ever present need for able and capable M&A specialists to lead these transactions from inception through close and integration.
I believe that many of these start-ups actually aim to get acquired by bigger companies and those large companies can efficiently run those start-ups to generate value. so basically it’s a win-win situation for both entities.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.