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Personal fairness companies can provide enterprise startups a viable exit possibility – TechCrunch

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4 years in the past, Ping Identity was at a crossroads. A venerable participant within the single sign-on market, its product was not a market leader, and after 14 years and $128 million in enterprise capital, it wanted to discover a new path.

Whereas the corporate had once discussed an IPO, by 2016 it started placing out feelers for consumers. Vista Fairness Companions made a $600 million offer and promised to maintain constructing the corporate, one thing that company consumers wouldn’t assure. Ping CEO and co-founder Andre Durand accepted Vista’s provide, seeing it as a approach to repay his traders and workers and exit the fitting manner. Even higher, his firm wasn’t subsumed into a big entity as seemingly would have occurred with a typical M&A transaction.

Because it turned out, the IPO-or-acquisition query wasn’t an both/or proposition. Vista continued to spend money on the corporate, utilizing small acquisitions like UnboundID and Elastic Beam to fill in its roadmap, and Ping went public last year. The corporate’s expertise exhibits that non-public fairness gives an inexpensive manner for mature enterprise startups with first rate however not distinctive development — just like the 100% or extra enterprise companies are likely to favor — to exit, repay traders, reward workers and nonetheless hold constructing the corporate.

However not everybody that goes this route has a tidy final result like Ping’s. Some corporations get introduced into the P/E universe the place they change the manager group, endure large layoffs or unload worthwhile items and cease investing within the product. However the three personal fairness companies we spoke to — Vista Fairness, Thoma Bravo and Scaleworks — all needed to see their acquisitions succeed, even when they every go about it otherwise.

Viable corporations with good numbers

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