Vista Point Advisors Survey: Executives in Tech Anticipate Renewed Surge in Deal Activity

Vista Point Advisors’ 2022 Founders Report examines factors driving both ARR growth and anticipated M&A among private businesses in technology and software sectors

SAN FRANCISCO--(BUSINESS WIRE)--Vista Point Advisors, a boutique investment bank that advises middle-market companies in the software, internet, and tech-enabled services market, today released its 2022 Founders Report: Software as a Safe Haven.

The report shares the results of a November survey of over 230 business owners, outlining both the pace and drivers of growth at privately held SaaS companies, as well as prospective M&A objectives among business owners. Even as inflation and lingering COVID fears instilled a level of uncertainty in public markets in Q4, according to the survey, roughly half of respondents are contemplating either a full or partial sale in the coming year, which suggests software M&A will maintain momentum in 2022.

“95% of respondents indicated their companies were on pace for positive, year-over-year ARR growth,” said Michael Lyon, Founder and Managing Director at Vista Point Advisors. “And a quarter of those polled expected to more than double their ARRs last year. These trends bode well for owners pursuing a sale over the next 12 months.”

The majority of survey respondents lead more mature businesses in the sector. Only a small minority (15%) of the owners’ companies qualify as startups at less than five years of age. In addition, the findings speak to characteristics somewhat unique to the market. Longer-tenured software companies, when they prevail against their heavily marketed, VC-backed peers, do so by being product-centric and selling sophisticated solutions that meet complex needs.

“The survey shed light on the prevalence of founders looking to sell in 2022, which is surprising given the significant deal volume of 2021,” said Mike Greco, a Managing Director at Vista Point Advisors. “Last year’s deal activity would have been materially higher were it not for the bottlenecks in the system resulting from too few M&A lawyers or consultants to shuttle transactions through the deal pipeline by year-end. Once this activity works its way through the market – likely by March or April – we expect the relative dearth of deal flow will again give sellers the upper hand.”

In addition to company growth and M&A planning, the survey also explored:

• Employee growth and areas within the business executives added resources;
• Where business leaders expect to find growth in 2022;
• Strategies to grow ARR and priorities driving capital allocation decisions; and
• Preferences between potential strategic or financial acquirers.

Download the Vista Point 2022 Founders Report

The data set used in the report has been aggregated and anonymized and is based on the responses from 234 middle-market internet and software companies in Q4 2021.

About Vista Point Advisors

Vista Point Advisors is a boutique investment bank that focuses on advising middle-market companies in the software, internet, and tech-enabled services industries. Our strategy is to partner with growing and profitable businesses that are interested in understanding their options in the marketplace. We focus exclusively on sell-side M&A and capital raising transactions. Vista Point Advisors is headquartered in San Francisco, California. For more information, please visit www.vistapointadvisors.com.