Startups · Strategic Partnerships

Do startups merge with other startups to form a bigger team?

Deepti Kalghatgi Founder & CEO, EX-Motorola,, business development, partnership, product management, healthcare

January 22nd, 2019

If startups have similar goals , is it good to form a partnership ? How does it work if 2 small companies plan to merge together ? Do they form another new company or work with any of their existing one.

Mark Warren Experienced Manufacturing Professional "Discovering Solutions with People"

January 23rd, 2019

Two companies, Confinity and X.com, that will eventually merge to become PayPal, launch separately and build competing financial products. The first iteration of the PayPal product is released by Confinity in later 1999. Reference Wikipedia

Steve Owens

January 23rd, 2019

It does happen. We are working with two startups now that are talking about merging. We had one company merger for 4 other startups - and eventually sold to a strategic.


Talk to a lawyer about the details!


Chowdari Babu Founder @ ismac.io

January 26th, 2019

All permutations are possible, if there are synergies , collaboration to achieve a vision

Eric Kaufman Managing Director, Acumen Business Advisors,llc, Startegic Advisor to startups and small businesses

January 25th, 2019

Deepti.

First, these two companies are starting as competitors. Do the benefits of potential synergy (and efficiency) outweigh the loss of independence each company currently enjoys?

There are many considerations beyond the necessary legal and taxation issues involved:

Do the founders want to relinquish control? If so, do the skills and personalities of the founders (and key employees) mesh?

Who will be in charge?

What' changes in equity and responsibility will occur when the merger is completed?


After the answers to these questions have been agreed upon, then, as Mr. Warren has suggested, talk to a lawyer - and an accountant.

Hope it works out.

Dan Light Farther faster with Dan Light Consulting

January 31st, 2019

I don't see why not, larger firms do it all the time for many different reasons. It's called a roll up.