Kind Of A Big Deal – Bedford Funding Buys VC Bust
VC-backed companies don’t have a lot of exit options right now, but (finally) private equity is stepping up to fill that void. Today Bedford Funding, a tech-focused PE fund, bought 100% of Authoria Inc. for $63.1 million. The software company has received something like $140 million in funding from at least seven different VC firms over the past nine years. (Details here.) As one source put it, “these investors were exhausted.” But we’ll get to the abysmal VC returns later. The main takeaway from this deal is that a PE firm has finally provided an exit for venture capital money. It hasn’t been too common, as VCs are still relying on trade sales or “APOs” (alternative public offerings). Or they’re simply digging in for longer hold periods. Seems silly to me--why wouldn’t they sell to a mid-market PE firm? I asked Charles Jones of Bedford Funding, Michael Blaber of Authoria, and some industry sources to break down the transaction.
