Should Your SaaS Startup Have a ‘Plan B’ Exit Strategy?

Less than 4.7% of VC-backed startups IPO

John Mecke
9 min readMar 22


It is every startup’s dream to go public. An IPO is the pot of gold at the end of the startup rainbow. As one of my startup friends says “All the blood, sweat, and tears will be worth it. I will finally get my dream Malibu beach house!” The unfortunate reality is that according to recent research by PitchBook of a cohort of 12,574 VC-backed firms from 2018, only 4.7% achieved an IPO. 39.2% achieved an exit via M&A, and the remaining 56.1% had no exit. SaaS companies raising VC investments are loath to talk about a non-IPO exit. Perhaps it is time for management teams to seriously consider having a ‘Plan B’ if their trajectory to an IPO looks shaky.

In this article, we will discuss:

  • The PitchBook Data
  • Maybe It Is Time for Your SaaS Startup to Have a Plan B
  • How to Build an Under-the-Radar M&A Exit Strategy 3
  • Understand M&A Options
  • Be Realistic About Exit Valuations
  • SEG SaaS Index: Public Market Multiples
  • Private SaaS Companies Are Valued Less Than Public SaaS Companies
  • Identify Potential Acquirers
  • Qualify Potential Acquirers
  • Network with Potential Acquirers

The PitchBook Data

PitchBook is a phenomenal source of quantitative data about VC and private equity-backed companies. PitchBook is a financial data and technology company that provides comprehensive data on private equity, venture capital, mergers and acquisitions, and other alternative assets. PitchBook recently released the PitchBook VC Exit Predictor, an AI tool that leverages machine learning and its vast database of information on VC-backed companies, financing rounds, and investors — to provide objective insights into startups’ prospects of a successful exit.

Pitchbook estimates that there are 120,000 active VC-backed companies.



John Mecke

John has over 25 years of experience in leading product management and corporate development organizations for enterprise firms.