How to Become the Target Firm: Analyzing Israeli Startups Successful Exits
Author(s)
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Abstract
Ideas is what any startup begins from, but only these with a practical application. While entrepreneurship refers to all new businesses, startups relates to the new businesses that intend to grow large beyond the solo founder. That makes them possible for being commercialized. Some startups become unicorns, privately held startup companies valued at over US$1 billion. Then, every company was at one time a startup. The aim behind the foundation of a startup is a successful exit, therefore we must always proceed taking in count to become the most desirable target firm, in order to be acquired by one of the worldwide large companies in each industry.
In the last years, tech giants have collectively made over 800 acquisitions, even amid the Covid-19 pandemic. Acquirers’ current and potential stockholders reward listed corporations after each Hi-tech startup acquisition (contrasting the uncertain results of general M&As) as they believe this is one of the best available ways to achieve new technologies.
This research aim is to identify the variables, factors, characteristics and circumstances that allow Israeli startups to become the desired target firm for bidding companies.
As a result of his personal expertise and as extended as updated available data, the author focused this project in several Israeli startups acquired by listed foreign firms in the last decade, hoping to allow a generalization of the findings, providing to new entrepreneurs around the world several tools toward a succesful exit starting from the very foundation of their own company.
The previous, using (among others) The Worldwide Business Evaluation Model for M&A, since it is as general as possible, tries to list all the involved parameters, and assesses the variables according to its grade of impact in each case, allowing the startups to obtain the highest qualification for each potential acquirer in every industry and country, in order to become the most suitable target firm.
Keywords
Entrepreneurship, Startups, Exit success.
JEL Code: M13, L26 & L32 (2019 Classification)
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