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20VC: Are IPO Windows Shut? Has Regulation Killed the M&A Market? M&A OG Frank Quattrone on Lessons from 650 M&A Deals Worth Over $1TRN and Taking Amazon, Cisco and Netscape Public

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Mar 1, 2024

Frank Quattrone, Founder of Qatalyst and tech M&A pioneer, shares his vast expertise in this engaging conversation. He discusses why current regulations haven't killed M&A, offering insights into the real causes behind the market slowdown. Quattrone compares today's lack of IPO activity to the dot-com bust, speculating on when the window might reopen. He reveals intriguing lessons from over 600 deals, including insights from acquisitions of tech giants like Amazon and LinkedIn, emphasizing the need for strategic foresight in navigating future trends.

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ANECDOTE

Career Inspiration

Frank Quattrone's career began after a Stanford class with Steve Jobs.
Inspired, he joined Morgan Stanley's new tech practice in San Francisco.

INSIGHT

Dot-Com Boom FOMO

Many investors missed out on early tech, finding Microsoft too expensive at 25x earnings.
The internet boom brought FOMO, with Netscape's IPO driving unprecedented demand.

INSIGHT

Valuation Inflation

Tech valuations escalated from earnings multiples to revenue multiples during the dot-com boom.
Eventually, even pre-revenue companies went public, valued by metrics like "eyeballs."

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Frank Quattrone is the Founder and Executive Chairman of Qatalyst and served as its CEO from the Firm's founding until January 2016. Over more than four decades, Frank and the teams he has led have advised on more than 600 mergers and acquisitions with an aggregate transaction value over $1 trillion and on more than 350 financings that raised over $65 billion for technology companies worldwide. Frank led the IPOs of Amazon.com, Cisco, Intuit, Netscape, among many others. He advised Apple on its $400 MM acquisition of NeXT (which led to Steve Jobs' return to Apple); Concur on its $8.3B sale to SAP; LinkedIn on its $28.1B sale to Microsoft; Qualtrics on its $8B sale to SAP and Twitch on its $1B sale to Amazon.com.

In Today's Episode with Frank Quattrone:

1. Has Regulation Killed M&A:

Why does Frank disagree that regulation has killed M&A?
What is the real reason why M&A is so down at present?
What would impact would a Trump administration have on the M&A environment?
What are some of Frank's biggest lessons from 600 prior transactions over dour decades of what happens when an M&A market shuts down?

2. When Will the IPO Window Re-Open:

Does Frank agree that the IPO window is currently closed for tech companies?
How does this IPO window compare to the dot com bust and 2007?
What is needed for the IPO window to re-open?
What is the timeline that Frank puts on the IPO window opening again?

3. M&A: How Do Companies Get Bought:

What is the process for a company to be bought?
What are the single biggest mistakes the seller makes in the process?
What do the best buyers and sellers do to get the best price?
Does Frank agree with the notion that "companies are bought and not sold"?

4. IPOing Amazing, Selling Linkedin and Qualtrics:

What is the story behind, Frank, Bill Gurley, Jeff Bezos and John Doerr pricing the Amazon IPO?
How did Linkedin come to be bought by Microsoft? What did that process look like?
How did Frank structure an event to ensure that Ryan @ Qualtrics and Bill McDermot @ SAP would meet and lead to the acquisiiton?