The 10-Step M&A Exit Playbook for Startups + M&A Deck Templates from Slack, Juniper, Activision and more

CVC Professional Explains M&A framework and How Founders Should Position Their Startups for a Successful Exit

Hey everybody, today I have something super interesting. My friend Tony agreed to do this guide for us.

When I first met Tony I was blown away by all his knowledge about Venture Capital and M&A and by what he was doing at work.

So, I got him to tell us all what matters to be able to exit with your startup 🔥

Tony Kim is a venture and corporate development professional focused on M&A and early- to growth- stage investing at a global technology company.

He previously worked at a multinational bank, advising clients on capital raises and strategic transactions across sectors including infrastructure and telecom.

“The views expressed in this article are solely the author’s and do not reflect those of any current or past employer”

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So here we go! Enjoy :)

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Positioning Your Tech Startup for a Successful M&A Exit

Exiting a startup is hard. Fewer than 10% of startups ever achieve any kind of successful exit. And among those exits, the vast majority are acquisitions rather than public offerings¹. With such steep odds for success, founders need every edge to navigate the journey toward a liquidity event. In today’s market, with IPO windows mostly stalled due to macroeconomic factors, more and more startups have been opting for M&A as their go-to exit strategy.

Understanding the Exit Landscape: IPO vs. M&A

Exiting via IPO is rare compared to M&A. In recent years, acquisitions have overwhelmingly dominated startup exits. For example, by 2021, M&A accounted for >90% of exits, and in the downturn of 2022 to 2024, this gap widened further as venture-backed companies saw over 34 acquisitions for every 1 IPO in 2024².

Positioning your company for a strategic M&A exit has therefore become essential. When executed well, M&A can provide greater rewards not just for investors, but also for founders and employees.

However, preparing for an M&A exit isn’t something to do at the last minute. It involves deliberate steps taken well ahead of time to make your startup attractive to potential buyers. From understanding what acquirers are looking for, to building the right relationships, to getting your financial and legal house in order, thoughtful preparation can make the difference between an average and a great exit.

How do Large Companies Typically Evaluate Acquisitions?

Many large corporations typically evaluate M&A opportunities through internal corporate development or corporate finance functions, while also receiving inbound deal flow from investment bankers.

While banker-led deals occasionally lead to meaningful transactions, many corporations prefer acquiring companies they’ve already been working with, whether through partnerships, vendor relationships, or commercial engagements.

Broadly speaking, large acquirers tend to evaluate M&A opportunities through two lenses: Acqui-hire and Product acquisitions.

Acqui-hires, or tuck-ins, often involve early-stage companies that are just beginning to generate revenue. These deals are typically driven by the value of the technology, IP, and team. Valuation factors may include employee count, location, roles, seniority, and recent fundraising activity.

Product acquisitions typically involve more mature companies with established revenue. These acquisitions are often driven by strategic goals such as horizontal or vertical expansion and are evaluated within the acquirer’s broader financial planning process. Valuation here depends more on internal financial forecasting and metrics such as revenue growth, customer acquisition, and business model scalability.

Navigating the Buyer’s Decision Process

The corporate development and finance team works closely with Business Unit (BU) Leads to scout the market landscape and discuss companies that they’d like to double-click on.

Initial engagement typically starts with a 30-minute to 1-hour meeting between corporate development and the startup. The purpose is to understand the company’s business and what it aims to achieve. Notes, impressions from the meeting, and often PowerPoint decks, typically requested by the corporate development team, are then shared with the BU to gauge whether there is further interest.

If the BU shows further interest, the next step is a detailed tech diligence session for the BU to dive deeper into the product and business. Depending on the session, a follow-up tech or GTM diligence session may be scheduled.

Once the BU indicates a desire to move forward, the acquirer usually considers a few key questions:

• Is it better to buy, build, or partner?

• Does the BU have the budget to onboard all employees?

• How much synergy could realistically be realized from the acquisition?

• What are the potential downsides, including impact on existing customers and partners?

• Will the deal require broader internal approvals depending on the transaction size?

It is important to note that BU engagement could cool down for many reasons: shifting priorities, OpEx constraints (one of the top reasons deals fall through), leadership changes, or internal restructuring. Consistency and persistence are key as a result. Founders should identify who the true decision makers are (often BU-level stakeholders) as they often have the final say.

When it comes to diligence, founders should be fully prepared going into the diligence meeting to answer any technical questions. In my experience, the startups that come best prepared often bring slides that lay out a joint vision, roadmap, and GTM plan. These materials show how both companies could work together long-term. Beyond the financials and the products, it’s often the founder’s broader vision that persuades buyers to move forward.

Simple Internal Buyer Flowchart

The 10-Step M&A Exit Playbook for Startups

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