We went through a theoretical company’s story while analyzing how the cap table evolved through various rounds of funding. Make sure to watch Parts

How much money do you get if your startup gets acquired?

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2021-06-12 07:30:06

We went through a theoretical company’s story while analyzing how the cap table evolved through various rounds of funding. Make sure to watch Parts 1 through 3 if you want to get a grip on that.

But if you are only in for the good stuff, that’s OK. This article will analyze a few exit scenarios for that theoretical company and how much money everyone does, or does not make.

BTW, a lot of the topics covered here were way beyond my expertise, Steve Barsh helped us put these estimations together. Make sure to check out his video on Startup Exits.

In a video a couple of weeks ago, Steve Barsh, one of the partners at DreamIt went over what each one of these acquisitions means. Make sure to watch that video for more context.

Let’s say this company started struggling soon after the round. It has managed to stay afloat, but it’s not growing very much.

There are some holding companies or funds that purchase SaaS companies and are very good at monetizing them. A SaaS company usually operates on a 75–85% gross margin (revenue vs. costs, meaning server costs).