Follow-Up & Resources: The State of Tech M&A in 2025-26

Macro environment is supportive for exits. Bernstein's base case has the S&P 500 reaching around 7,000 by year-end 2026, with earnings growth and reduced policy uncertainty creating a constructive backdrop for liquidity events.

Silicon Valley remains the epicenter of tech deal activity. The Bay Area logged 2,600+ deals in 2025, with roughly 65% of all US venture capital deployed here—and a meaningful premium over national valuation medians.

AI-native businesses can command premium valuations. Buyers are prioritizing real, AI-driven revenue and ROI—not just "AI-powered" marketing. GenAI infrastructure, enterprise apps, cybersecurity, data platforms, fintech, robotics, and dev tools are particularly in focus.

Preparation months in advance is non-negotiable. The companies that win in M&A treat it as a disciplined process, not a lottery ticket—clean data rooms, clear narratives, and a strong operating cadence drive real valuation premiums.

Revenue quality matters more than ever. Buyers are laser-focused on recurring revenue, unit economics, and customer concentration. As a rule of thumb, no single customer should represent more than 20% of your revenue.

Operational readiness and clean cap tables are essential. Documented processes, reduced key-person risk, clear IP ownership, and a cap table that doesn't require forensic work are now table stakes.

Tax planning must happen before the deal, not after. Strategies around QSBS, non-grantor trusts, and thoughtful pre-sale structuring can dramatically change what you keep after a transaction. Waiting until you have a term sheet is often too late.

Expect a 6–9 month process from prep to close. A well-run, controlled auction with proper preparation still requires time for positioning, due diligence, negotiations, and closing.