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I was talking to a friend yesterday about exits. In it, he suggested that the tech M&A market had shut down just like the tech IPO market had.
This didn’t square with my experience. I’ve seen plenty of modest M&A in the last two months (which I categorize as sub-$100m deals.) Two popped up today – AOL acquired Sphere for a reported $25m and someone is rumored (possibly Expedia) to have acquired Farecast for $75m.
While these are modest acquisitions, they are not distressed deals (e.g. company that is struggling gets bought for very little by other private company, usually for private company stock.) There are plenty of distressed deals happening – they are usually pretty easy to recognize.
While modest deals aren’t the end game of a VC investor, they are definitely a key part of the diet. Everyone knows that "singles and doubles" don’t turn a VC fund into a winner, but they are needed to fill in the holes. So – it’s good to see a steady tempo of these modest deals continuing. Plus, it makes for good copy.