Private equity buyouts have effectively become a third major exit route for software companies as IPOs and M&A slow, according to venture capitalist David Sacks.
“Historically we only had two good exits for software businesses,” Sacks said on the “All-In Podcast” released on April 24. “One was IPO, the other was M&A. And then these big private equity shops came along and gave us a third potential exit.”
That third path, selling to private equity firms using heavy debt, is gaining traction as traditional exits cool and AI reshapes SaaS economics, said Sacks.
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Sacks made the comments during a sharp downturn in public software stocks.