Pivotal Labs Acquired?
gigaom.com
gigaom.com
I rely on Pivotal Tracker. I actually love using it, it's made programming a joy as it's made the chore of project management a useful and almost satisfying thing to do.
In recent years I've relied on other products from companies that, having been acquired, are either "improved" so that they no longer work for my purposes or shut down.
It gives me a nagging feeling that people aren't in this to produce great products for the long term. I really want to be proved wrong, especially with Pivotal Tracker, because after having used so many other tools for project management I cannot imagine having to go back to them.
1. Pivotal's business is solid, and growing. But they must feel chagrin when they can only charge consulting fees while their clients, whose products they helped build, are going to be creating hundred-millionaires in short order. This might persuade Pivotal to give up their future business potential in exchange for stock options to share in the goodness. This rules out Google.
2. Twitter doesn't really need more programmers. It needs to figure out how to monetize. So Twitter+Pivotal is not worth that much more than Twitter alone.
3. Square has obvious potential, proven monetizability, and the only thing holding them back from chasing the huge array of obvious opportunities is a lack of programming talent. If they go too slow, their well-funded competitors (Visa, Mastercard, PayPal, banks) may well beat them to some markets. There's definitely a first-mover advantage to getting payment devices in the hands of businesses in any given market.
All this should incentivize Square to offer a large chunk of stock to Pivotal, which should incentivize Pivotal to be acquired by them.
The first two seem, well, obvious. I can count many Pivots that ended up at Twitter over the last 2-3 years. Both companies rely on Ruby/Java and SF's talent pool is practically drained.
A Google acquisition, while far fetched, also makes sense given that Pivotal is stacked with agile/Java broskis. Hard to imagine what the Pivots would work on. Android? Google+?
(Whilst also generating healthy profits in the meantime.)
Valuations are calculated very, very differently than for product businesses. There exist consultancies which have sold for amounts in excess of every YC company which has exited through today, although I don't know of any examples off the top of my head which rival Dropbox / Airbnb / etc.
But I'd you're doubting that e.g. you can sell a consultancy for $20 million or $200 million, you're doubting an observable feature of material reality.
* Consultancies are nominally the experts you call to compensate for gaps in your inside staff.
* You can run a contract with a consultancy first, and consider acquisition only if it goes well and if their people fit well with your people.
If you were aiming for that particular exit strategy, it sounds like it could be much more effective than building a random web / mobile product without a sustainable revenue model beyond "get funding, hope it lasts until someone buys you."
Groupon is big, growing their Bay Area presence, and a Rails shop, so they're a possibility.
But I heard the acquirer is actually EMC.
I can't see any, but I don't know if I can see the whole picture or not.