Merger & Acquisition (M&A)
The general category of deals in which one company combines with or purchases another, the most common venture exit path.
M&A refers broadly to transactions where companies combine (mergers) or one company purchases another (acquisitions), and it's by far the most common exit path for venture-backed startups — far more companies exit via acquisition than via IPO. Acquirers can be strategic (an operating company buying for product, team, or market reasons) or financial (private equity, buying for standalone financial return).
M&A deal structures vary widely: all-cash, all-stock, a mix of both, with or without an earnout, and with escrow holdbacks for post-closing risk. Deal value and structure depend heavily on the acquirer's rationale — a strategic acquirer buying for technology or talent often values the deal very differently than a financial buyer evaluating standalone cash flows.
Run even an inbound acquisition offer as a real process with legal and banking advisors rather than negotiating solo — a competitive process, even an informal one, is consistently the single biggest lever on final price and terms in M&A.
What's the most common way venture-backed startups exit?
Acquisition, by a wide margin — IPOs are rare relative to the total number of venture-backed companies, while strategic M&A accounts for the large majority of successful venture exits.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.