Think all software companies are selling for billions of dollars now? Think again

While most VC’s will tell you that they want to focus on startup shooting for the moon and selling for $1B+, the data shows that even selling for $100M is not the norm. In fact, over the last few years the median acquisition price of a software startup has declined from $80M in 2014 down to $60M in 2016 according to data posted on popular VC Tomasz Tunguz’s blog:

median_software_ma_value

(Source – tomtunguz.com)

Of course it’s easy to say that a billion dollars is the place to be, and make it sound downright normal since the average deal size is getting closer to a billion every year. The reason for this is that the big, juicy, monster deals, are getting bigger. Companies selling for $10B, $20B and even as high as $29B are bringing up the average and making to seem like we’re in some kind of magical unicorn playground.

unicorn

So while a billion dollars might sound great, don’t let anyone fool you into thinking that most successful software companies sell for a billion dollars…take a zero off the number and you’re still about $40M north of the median.

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