The Exit Conundrum

Credit: zero take

As summer winds down, the positive macroeconomic picture has renewed optimism that exits and deal-making will improve in the coming months. With inflation falling and the potential for rate cuts looming, we have already seen signs of this recovery in 2024.

Pitchbook reports that the number of M&A deals in the first half of 2024 is 10% above the same period for 2023, while deal value is up 15%. This is being driven by corporate acquisitions and PE-related deals. That said, M&A is still probably being held back for a couple of reasons.

First, while PE-backed exits present a range of scenarios that create liquidity for long-time investors, they present founders with difficult choices about giving up control. Second, investors are still spooked by regulatory issues after intense scrutiny led to the cancellation of several mega deals, including the $20 billion Figma-Adobe acquisition abandoned in late 2023 and Amazon’s decision to drop its $1.4 billion bid for iRobot.

Meanwhi…