A Deep Dive into the Dynamics of Startup Acquisitions
The tech community was abuzz with rumors last month when news broke that Google had set its sights on cloud security startup Wiz, offering an unprecedented $23 billion. While the deal ultimately fell through, it’s worth delving into the fascinating mechanics behind such negotiations and exploring how startups make the weighty decision to sell or stand alone.
Although Jyoti Bansal, founder and CEO of developer tools startup Harness, cannot provide direct insights into the Google-Wiz negotiations, he can draw from his personal experience of being courted by a major player. In 2017, Cisco acquired his previous startup, AppDynamics, for a staggering $3.7 billion, just days before it was slated to go public.
Bansal highlights three crucial factors at play during these high-stakes transactions. Firstly, the seriousness of the offer itself is of paramount importance. Is it a tentative exploration or a solid proposition? Given Wiz’s status as a private firm, an exploratory phase is likely at the outset.