Exit Strategies 401 Workshop (Waterloo) Part 2: Everything is changing

BY Basil Peters

This post is number 2 in a five-part series of posts on Exits Strategies. In this post Basil Peters explains how rapid changes in technology and business have created a unique opportunity for acquisitions of early stage and growth stage technology companies. The boom started in the early 2010s and has continued for more than a decade, the longest bull run in history, despite a volatile economy and financial markets upset by the COVID pandemic.

This Exit Strategies workshop was first presented at the Golden Triangle Angel Network in Waterloo, Ontario on May 8, 2015. The Exit Strategies series has since been presented dozens of times to angel and entrepreneur associations around the world.


At the time this presentation was first delivered in 2015, the world was just becoming aware of fundamental shifts in where innovation was occurring and how wealth was being created. Large companies which had driven the technology industry for decades were now faltering. Nortel went from representing one-third of the market cap of the TSX in the dot.com bubble to bankruptcy in less than a decade. Other giants like Microsoft, Intel and Cisco had not created any shareholder value in years.

Basil was among others who observed that large companies had lost their ability to innovate, and as a result were losing the technical race, but more importantly, were losing their best and brightest. Talented engineers were migrating to start-ups where things moved quickly, technology was on the cutting edge and stock options could potentially create huge wealth.

The large companies were under growing pressure to deliver growth. They determined that it was easier, cheaper, and faster to acquire early-stage tech companies than to overcome the inertia of big company bureaucracy. As a result there was a growing trend to early acquisitions of tech companies. Most acquisitions were below the level of materiality for public company disclosure so comprehensive data was, and still is, hard to obtain. The best estimate in 2015 was that the median acquisition was approximately $15 million.

Since then, the trend to early exits has accelerated. Startups, particularly fully-remote companies, can start, scale and disrupt entrenched companies quickly, and with little financing. They are highly attractive acquisitions for large enterprises needing to innovate. They are worth more money at exit.

Since the onset of the pandemic in 2020, central banks have flooded the economy with liquidity, further fuelling the acquisition boom. More early-stage tech companies are being acquired at ever-increasing prices. Basil predicted in 2015 that we were in the Golden Era for tech company wealth creation. Into the 2020s, the gold is shining brighter.