The $2.5B acquisition of Manus exemplifies a "local maximum" exit. While VCs might push for a higher valuation later, the founders rationally chose to sell. This decision optimizes their personal, undiversified financial outcome by de-risking against future competition and market shifts.

Deals like Naveen Rao's $1B raise at a $5B pre-money valuation seem to break venture math. However, investors justify this by stipulating that proven founders in hard infrastructure markets compress key risks, making market size, not execution, the primary remaining question.

Though Capital One's acquisition price for Brex is less than half its peak private valuation, it's a strategic success. It provides a guaranteed cash-and-stock exit for investors, avoiding the significant stock price drops and public market volatility seen by recently public fintechs like Klarna and Chime.

Brex's acquisition creates a complex challenge for its rival, Ramp. While validating Ramp's market leadership, it simultaneously establishes a low public M&A valuation multiple (7x revenue vs. Ramp's 30x), and introduces a powerful competitor with a structural cost advantage via the Discover network.

The first question in any fundraising or M&A discussion is always, 'What was your last round price?' An inflated number creates psychological friction and can halt negotiations before they begin. Founders should optimize for a valuation that allows for a clear up-round, not just the highest price today.

Accepting too high a valuation can be a fatal error. The first question in any subsequent fundraising or M&A discussion will be about the prior round's price. An unjustifiably high number immediately destroys the psychology of the new deal, making it nearly impossible to raise more capital or sell the company, regardless of progress.

Valuations don't jump dramatically; they 'sneak up on you.' An investor might balk at a $45M cap when they expected $40M. But the fear of missing a potential unicorn is stronger than the desire for a slightly better price, causing a gradual, batch-over-batch inflation of valuation norms.

To generate returns on a $10B acquisition, a PE firm needs a $25B exit, which often means an IPO. They must underwrite this IPO at a discount to public comps, despite having paid a 30% premium to acquire the company, creating a significant initial value gap to overcome from day one.

Capital One's $5.15B purchase of Brex is part of a larger pattern. They previously acquired not only Discover but also Peribus, the former company of Brex's founders. This demonstrates a consistent strategy of acquiring not just fintech assets but also proven entrepreneurial teams with whom they are familiar.