How to Buy Companies That Aren't Profitable Yet

Matt Arsenault, VP of Corporate Development & Strategic Alliances at Jamf

Venture-backed companies are priced at their future state, not their current revenue. When growth stalls and another fundraising round stops making sense, the gap between VC valuation and what a strategic buyer will pay becomes the hardest conversation in any deal process. Matt Arsenault, VP of Corporate Development & Strategic Alliances at Jamf, has run this play across hundreds of targets. His work starts before the deal does, with the founder relationship, the cap table, and a clear-eyed conversation about risk tolerance that most corp dev teams never have.

What You'll Learn

• Why a $25M offer today can beat a $125M VC exit three years out
• How AI is shrinking the moat of wrapper-product startups and changing target screening
• The seven stakeholder groups in any acquisition and why most founders miss them
• How liquidation preferences and cap table structure change the math behind any offer
• Why VC relationships matter as much as founder relationships before a deal starts
• How to structure deals for underwater targets without losing the team
• What entrepreneurs should know about VC terms before taking their first check

If you're working a deal where the founder's VC valuation is the first thing they said and the last thing they'll let go of, DealPilot, powered by M&A Science, gives you the guidance to close the gap without overpaying.

____________________

This episode of M&A Science is presented by DealRoom.

DealRoom just launched the only MCP server built for Buyer-Led M&A™ — so your AI and your deal data finally work together. Connect Claude, ChatGPT, or Copilot directly to DealRoom and let your AI read your pipeline, analyze due diligence documents, and automatically write findings back.

See for yourself: dealroom.net/mcp

____________________

Episode Chapters

[00:01:14] Introduction and Kison's overview

[00:03:32] Matt Arsenault's background and path into M&A

[00:05:17] How VCs actually value companies: the two major components

[00:06:52] Where VC and strategic buyer valuations diverge, and why

[00:09:29] The current market for VC-backed acquisition targets

[00:10:39] Rule of 40, profitable growth, and what AI is changing

[00:25:01] The liquidation preference math: $25M today vs. $125M later

[00:31:38] Cap table dynamics, voting power, and co-founder alignment

[00:33:10] How to have the valuation conversation with a founder

[00:35:35] How to structure deals when a company is underwater

[00:36:45] Stakeholder management: severance, retention, and employee equity

[00:44:03] Structural tools for bridging valuation gaps

[00:49:21] What entrepreneurs should know before taking their first VC check

[00:51:03] Due diligence war stories: what a code scan revealed