M&A key exit for VCs in Western countries. A new report from E&Y about global venture capital trends says that the main exit route for VC-backed companies in Western countries is M&A, representing 80% to 90% of all exits. E&Y says prices “should remain fairly high” and M&A activity can be expected to remain constant or increase over the next year.
For example, in the US for 2011, the five biggest acquisitions ranged from USD700 million to USD800 million. Google alone has acquired 48 companies in 2010 and 79 companies in 2011.
Similar acquisition trends are evident in rapidly developing nations, particularly China, where Tencent, Baidu, Alibaba, Sina, Huawei, ZTE are expected to be active.
One other major point made by in the study is that unlike the West, emerging markets, such as China, India, and Brazil are able to take the IPO exit route as the more common form of returning money to VC investors, as does Japan, Korea and Taiwan. (Image Source: EY Globalizing venture capital: Global venture capital insights and trends report 2011)