Introducing HyperExits — the handbook to successfully sell a startup

It’s no secret that building a startup can be one of the hardest, hair-greying experiences you can choose in your career. Even with the brightest idea, the clearest vision and the best team around you, there are countless challenges that can sink a young business. 

But while there’s an ever-growing trove of online information for founders, telling them how to successfully grow a company, there’s very little out there to educate people on how to navigate the sale of a venture-backed startup. It’s even more true outside of Silicon Valley, where founders have been at this for longer and information on acquisitions is shared more readily.

That’s why we’re launching HyperExits — a resource for the European tech community that prepares founders for what can be one of the toughest chapters in a startup’s story. Acquisitions can be extremely brittle processes, littered with hazards around every corner that are often dressed up in corporate financial language that technical founders aren’t naturally familiar with.

We’re here to cut through that jargon, and serve you clear, digestible and useful information on how to optimise your business for every part of the sale process. We want founders outside of San Francisco to be operating on a level playing field, so that they can get a good outcome when they come to sell, and subsequently strengthen European tech by reinvesting their exit capital into the ecosystem.

HyperExits is launching at a pivotal moment in the history of venture-backed tech. IPO markets are yet to stutter back to life and growth financing is harder to come by than in recent times — meaning that scaleups with cash in the bank are well-placed to buy up smaller competitors.

More so than ever, founders need to be equipped with the right information to make sure they sell well when the moment arrives.

HyperExits is here to give it to them.

The state of the market

Despite many predicting that these factors would lead to an M&A feeding frenzy in 2024, the picture is actually less clear than that. If we look at the number of deals done by the most valuable software acquirers, the market is actually slower than ever.

But this doesn’t mean that the M&A market is fully in retreat. 

If we look at all Fortune 500 companies and their activity buying up startups, it’s true that the number of deals is on a downward trend. But when we look at the value of those deals combined, 2023 was the most prolific year since 2018 (if we discount 2021 when valuations were unnaturally high). 

If the value of startup M&A deals in the second half of 2024 lives up to what we saw in the H1, we’re in for the biggest year on record.

Turning to Europe specifically, it’s clear that not all verticals are equal when it comes to M&A today. 2023 was an active exit market in the payments space, but it’s likely that many of these will have been lower value deals, with companies struggling to hit profitability and selling to competitors as they struggle to raise more capital.

That’s backed up by the H1 numbers for 2024, which show that fintech was one of the quietest sectors for disclosed exits worth more than €100m in Europe.

When looked at together, these numbers suggest that large companies are still willing to buy startups, even if the biggest software buyers might be less active than in the past, and that we are likely to continue to see consolidation in overcrowded spaces.

Crunchtime

These dynamics have led us into a de facto buyers market for VCs today, and founders need to learn how to navigate a world where investors are offering startups increasingly tougher terms in exchange for their capital.

Many startups are launched by people with engineering backgrounds who are having to learn two things simultaneously: how to find product market fit and scale a team, and how to do a complex dance with a group of investors as a company builds towards an exit.

The latter involves getting to grips with the impenetrable financial and legal terminology found in VC term sheets, learning to manage board committees and getting the right insurance to future-proof a company’s sale options.

There’s also the delicate and fragile nature of the sale process itself where founders need to learn to court multiple bids, build data rooms and negotiate well — all the while keeping their business running and not taking their eye off the operational ball.

As we build the HyperExits platform for the company building community, we’ll be unpacking everything from the big picture issues founders need to consider, all the way down to the nitty gritty details at play across different verticals. We’ll bring you insights from people with inside-out knowledge of the exit process — including lawyers, bankers and serial acquirers and founders — as we build the European playbook for how to sell your company.

We chose the name HyperExits because the VC-backed founder community in Europe is learning fast how to pursue a successful HyperGrowth scaling strategy. Now — as we try to incentivise entrepreneurship, ensure the best outcomes for ambitious founders and keep the European tech flywheel turning — we need to level up and focus on HyperExit strategies too.