M&A

Mergers and Acquisitions (M&A) describe the transactions through which companies combine or one company acquires another. For VC-backed startups, M&A (acquisition) is the most common exit path — far more common than IPOs. Acquirers buy startups for multiple reasons: acquiring technology (acqui-tech), eliminating competition, expanding into new markets, or acquiring talent (acqui-hire). Deal structures vary: asset purchases (buyer acquires specific assets), stock purchases (buyer acquires all shares), and mergers (companies legally combine). Purchase price is often structured as upfront cash + earnouts (contingent payments based on future performance milestones). M&A exits can range from fire-sale acqui-hires at minimal value to multi-billion dollar strategic acquisitions.