AngelList has changed the investment landscape by creating an online space where entrepreneurs can connect with the investors. Now a site called Exitround may do the same at what, for many startups, is the other end of the process, offering a marketplace where small, seed-funded companies running low on cash can find potential acquirers.
The idea of a marketplace built specifically for talent acquisitions may seem pretty faddish — something founder and CEO Jacob Mullins doesn’t deny. When I asked if something like Exitround could only exist now, Mullins said, “to a certain extent, yes.” Nonetheless, he argued it’s a real need that he’s seeing in the industry. Mullins is currently a senior associate at Shasta Ventures (he previously helped launch Microsoft’s BizSpark program, and he and I worked together when he was the business manager at VentureBeat), and he said, “This is something that venture people do on a normal basis — connect portfolio companies to potential acquirers.”
“That’s not happening in the seed market for a couple of reasons,” Mullins added. “Some of these seed funds have very large portfolios. And as the potential is maxed out in the traditional channels for M&A in general, companies are starving for talent. No one can hire fast enough.”
In fact, even though Exitround is only officially launching today, it has already signed up some big potential buyers, including Google, Groupon, Topix, Threadflip, and Accenture.
One of the challenges of building a site like this: Startups probably don’t want to advertise the fact that they’re looking to sell. At the same time, Mullins said that for teams that are running out of money and unable to raise the next round of funding (most likely a Series A), a small talent acquisition can be the most appealing option — it can allow them to “land their team somewhere,” deliver a small return to investors, and put an acquisition on their resumé. And given the factors mentioned above, they could be a pretty appealing acquisition target. But if the team members don’t have the right connections, they probably don’t know how to make it happen.
So an entrepreneur can go to the Exitround site and fill out a short application outlining the basic details of the team and of what they’re looking for in an acquisition. Mullins said Exitround vets all the applications in order to make sure there are only high quality teams in the marketplace. If they get approved, they’re asked to provide more information, which is then anonymized and presented to potential buyers — so Google can decide whether it’s interested in, say, a team of three with specific areas of technical expertise, but they shouldn’t have enough information to figure out what the specific company is.
If the acquirer expresses interest, the startup can decide whether or not they want an introduction, and if they do, Exitround connects them. From there, the negotiation process proceeds normally. Exitround only makes money if the acquisition actually happens, charging a recruiting fee of between $10,000 and $20,000 per hire.
Mullins (who developed the site with his technical advisor Greg Dean) said the version of the site that’s live today is very much a minimum viable product, and that he’d like to add features that make it easier for buyers to filter their options based on different characteristics.
Mullins is still working at Shasta and treating Exitround as a side project — “I’m openly throwing this out there as an experiment,” he said. However, if it does well, he said he’s open to working on it full-time. Though even if Exitround does become a huge hit, given its emphasis on secrecy and discretion, most of us may not know about it.
“It’s a dirty job,” Mullins said. “If we do our job right, you just see press articles about companies being sold. Nobody knows about it except for a limited number of users.”