Insights From The Data
Although the most common age for exits over this time frame is four, in the past twelve months the prevalent age shifted to six. Half of all exits are happening before the age of ten which has been consistent over time.
The volume of software company exits in the northwest has increased dramatically over the past five years and doubled between 2015 and 2018. The average age at time of exit, however, has remained fairly consistent with 98% of the transactions being done through M&A. The charts below show further details.
We compared these results to the rest of the United States and found that the overall trends are consistent with a few exceptions. The average age of companies at IPO through the US is gradually going down while that of the northwest companies has gone up. In addition, the percentage increase in exits in the northwest is increasing at a steeper rate than the country as a whole.
Insights From Intermediaries
M&A Advisors and Bankers that were interviewed state that many of their customers were not planning for their exits and they moved into the process with little advance notice. This, in turn, had an impact on the ability to achieve desired exit valuations in some (not all) cases. They suggest stage specific strategies be woven into the overall company plan to improve results.
Additional Data on Exit Volume and Age