A “Big Ten” Roundup of Acquirers

Before you read this, read this.

A security startup —- say, one that produces histographic anomaly prevention systems —- has a $10MM third year of operations, with 65 customers. They’re tired, and they’ll give up the company for 5x trailing revenue, or $50MM. Who do they sell to?

Here’s a straw-man “top 10 security exits”, ranked by the impact a cash $50MM has, both in terms of last year’s top-line 10K revenue (how big is $50MM relative to the amount of stuff the company sold) and their net tangible assets (how big relative to what they have in the bank). Neither is a “reliable” indicator, but then, neither is K-K after a 2-3-4 heart flop.

The obvious caveats apply, including: every startup has its own list of exists (mine doesn’t include indie switch vendors, for instance) and big companies not on the list could at any moment decide to become a player in the space (for instance, MSFT isn’t here, nor are Dell, HP, or Sun). For example, EMC could buy RSA. Oh wait.

A startup making 20-30MM a year has probably started gaming out going public.

It’s a bit gauche (for lack of a better word) to post something like this; it’s kind of “not talked about” inside vendors. I’ve got a pretty decent mix of vendors here, so don’t accuse me of posting our bizdev hit lists. We’re not smart enough to have one.