M&A deals: Alpha that too many overlook
Mergers and acquisitions (M&A) doesn't always get the love it deserves, but it should. Across the economy, M&A delivers huge value to everyone when it’s done right. For strategically smart entrepreneurs and founders, it opens the door to sector-disrupting synergies of talents, intellectual property (IP) and revenue streams. For investors, it can be a stunning source of alpha and return on investment (ROI).
A recent report published by Bain earlier this year makes all this clear, highlighting that since 2014 the value of M&A deals worldwide has amounted to an absolute minimum of $3.6 trillion each year. In 2021, the total value of M&A deals hit $5.9 trillion, a record-breaking figure.
So why aren’t we seeing more M&A deals in the Web3 space?
As the Bain report makes clear, however, good M&A deals don’t come easily, noting that “2021 brought a nuanced and evolving market – one that demanded an expanded set of skills and a deep understanding of the deal landscape.” No matter the industry, getting value from M&As is impossible without access to the right knowledge, expertise and deal partners.
It's ironic that right now, arguably the sector that offers some of the greatest potential for M&A deal value is the one where M&As are most difficult to realize – because of the huge disconnects in the knowledge and skills flows between prospective buyers and sellers. That sector is Web3, which encompasses technologies that tomorrow’s economy is already being built on: cryptocurrencies, non-fungible tokens (NFT), decentralized autonomous organizations (DAO) and decentralized finance (DeFi).
One major roadblock to Web3 M&A deals is that, unlike in longer-established sectors, there is no single information point for viewing companies available for sale. And building one for the sector is made much more difficult by the fact that Web3 entrepreneurship culture places an extremely high value on confidentiality and trust. Operating in a market known for volatility, most leaders of Web3 ventures are rightly suspicious about publicly disclosing any information that could cause a sudden downswing in value – especially if that information hints that they’re planning to exit the venture. This is why, at present, Web3 M&A deals are accessible to only a tiny set of industry insiders.
Moreover, prospective buyers and investors need more than knowledge that a company is for sale. They need to be able to turn to experts who can exercise trustworthy due diligence to assess a potential acquisition. Because Web3 is such a young sector, the pool of financial, technical and legal experts who are able to critically assess the viability of a potential M&A target is very small indeed.
Acquire.Fi is what Web3 M&A has been waiting for
But it looks like there’s a shakeup coming to the world of Web3 M&A, in the form of Acquire.Fi, a firm on a mission to make Web3 acquisition investments transparent and open to all. The firm’s founders come from a diverse range of backgrounds, including a co-founder of crypto unicorns, a veteran M&A deal builder, a lawyer specialized in Web3 ventures and a blockchain protocol developer. It’s the ideal mix of skills to tackle the challenges unique to Web3 M&A.
The team began by masterminding deals between two groups of people: investors in their private network who were interested in entering Web3, and founders of crypto companies who were looking to liquidate their holdings. In arranging these deals, the team witnessed not only the enormous opportunities for alpha that Web3 M&A could offer but also the many hurdles standing in the way of unleashing this market’s potential and opening it up to investors from outside exclusive networks.
From this beginning, Acquire.Fi has evolved to become the world’s first marketplace for M&A deals involving ventures from across the entire Web3 space. For the first time, prospective investors and sellers will be able to find one another based on transparent mutual interests, rather than the good fortune of being in overlapping private networks. Every bit as important, they will be able to call on the Web3-native legal, technical and financial expertise of Acquire.Fi’s uniquely qualified team to provide due diligence and valuation services.
What’s worth stressing here is just how wide open Acquire.Fi will make Web3 M&A deal opportunities. Perhaps the most intriguing feature of the platform is its integration of fractional ownership options. On the entrepreneur side, this will allow founders much easier access to capital raising because they will no longer be reliant on a small pool of big investors for funding. From the investor side, this feature will universalize access to Web3 acquisitions, one of the most powerful wealth-building strategies, even in the context of digital assets’ current market. The investment ecosystem that Acquire.Fi is creating here is also going to bridge the DeFi and traditional finance (TradFi) worlds, because fractionalized real-world assets for sale can be acquired as NFTs, which can be traded immediately on secondary markets.
Until now, Web3 has been among the most risk-heavy, opaque and investor-excluding markets when it comes to M&A. But there’s hope that could change because of Acquire.Fi’s transparent model. By providing a central marketplace for buyers and sellers to meet, and combining it with valuation guidance plus investment options to suit needs from across the DeFi and TradFi spectrums, Acquire.Fi could even make M&A deals for Web3 more accessible and profitable than those of longer-established sectors.
To find out more, visit Acquire.Fi, where investing and Web3 intersect, creating a new wealth-building paradigm for all.
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