In the end, the real measure of a good exit isn’t speed. It’s whether you still respect the business you built, and yourself, writes Angelo Mazzone.
When Australian software company Phocas announced its $500 million sale to US private equity group Accel-KKR, the story stood out for all the right reasons. Not because of its valuation or its buyer, but because of its title: “Slow burn, yes please.”
In an era obsessed with rapid scale and fast exits, Phocas is a reminder that patience still pays. After 24 years in business, its three founders walked away owning more than 80 per cent of the company, a rarity in modern tech, where founders are often heavily diluted long before an exit.
It’s the kind of deal that feels almost nostalgic. A quiet success story built over decades, funded by cash flow rather than capital rounds, ending not with a frenzy but with a well-earned payday. And it begs the question, maybe the old-school approach to building and selling a business was never broken to begin with.
Contrast that with Oliver Curtis’s Firmus, which just announced an extraordinary $73.3 billion plan for an “AI factory” in partnership with Nvidia and CDC. This is a different universe entirely. That is, capital-intensive, globally ambitious, and designed to move fast enough to compete with the biggest players.
For ventures like Firmus, dilution is inevitable. High-growth start-ups rely on deep-pocketed investors to fund rapid expansion, and those investors typically expect significant equity in return. Founders in these environments often end up holding 20–30 per cent of the business (sometimes less) by the time they exit.
The logic is simple: in a market where speed and scale determine survival, control takes a back seat. The founders’ smaller share of a much larger pie can still translate into huge personal outcomes, provided the company delivers on its growth potential.
These two deals, Phocas and Firmus, illustrate that there’s no single blueprint for success. The right approach depends on the nature of the business, the temperament of the founders, and the risk they’re willing to carry.
In recent years, a middle ground has emerged: the secondary market. Instead of selling the company outright or raising a dilutive new round, founders and early shareholders sell a portion of their shares to new investors.
This approach offers several advantages. It gives early backers some liquidity, de-risks the founders’ personal position, and allows new investors to come in without expanding the overall share pool. Just as importantly, it keeps the founders engaged and invested, both financially and emotionally.
Secondary transactions were once rare in Australia’s private markets. Now they’re becoming a common feature of growth-stage deals, particularly as global investors take more interest in Australian tech.
The M&A landscape itself has also changed. Twenty years ago, it would have been difficult for an Australian company like Phocas to attract interest from a major US private equity firm. Today, cross-border deals are routine. Digital platforms, global investor networks, and a more mature local ecosystem mean founders have more options than ever, both in how they raise capital and how they exit.
Globalisation has also opened the door for different deal structures. Strategic investors from overseas can take minority stakes, partner on expansion, or acquire in stages. These kinds of arrangements didn’t exist in the same way for earlier generations of Australian founders.
While fast-moving, high-risk ventures will continue to dominate sectors like AI, biotech, and green energy, the Phocas model – a slower, deliberate build – may start to look more appealing again. In a world where venture capital has become more cautious, particularly after events like the StrongRoom AI fiasco, founder-led businesses with healthy balance sheets and patient growth stand out from the pack.
What do these deals say about Australia’s M&A market? We have a healthy ecosystem. In the end, the real measure of a good exit isn’t speed. It’s whether you still respect the business you built, and yourself, when it’s all said and done.
Angelo Mazzone is a partner in corporate transactions at Taurus Legal Management.
