As 2025 began, many founders, investors, and legal advisors entered the year with cautious optimism that tech startup acquisitions would rebound. A new administration in the White House had stirred talk of pro-business sentiment, and some dealmakers hoped for a more stable climate for mergers and acquisitions following several choppy years. But the reality, just months into the year, has proven far more complicated.
Tariff Affect on Tech Startup Acquisitions
That optimism began to fade as the new administration—led by President Trump in his second term—rolled out unpredictable tariff and trade policy decisions. For strategic acquirers, particularly large public companies and international buyers, this instability is causing hesitation. The result is a more risk-averse M&A landscape, where deals that might have closed in a more stable macroeconomic environment are now being delayed, downsized, or abandoned altogether.
Ofer Schreiber, a senior partner at YL Ventures and head of its Israel office, described the situation bluntly in a recent interview with Crunchbase News: “M&A activity is more directly influenced by macroeconomic conditions … particularly when it comes to large, publicly traded strategic acquirers. In the current environment — marked by market instability and shifting valuations — these players are becoming more cautious and less inclined to pursue acquisitions.”
This trend is being felt acutely in the tech startup acquisitions space, where early-stage and growth-stage companies traditionally view M&A as a leading exit strategy. Even in a strong fundraising market, many startups build toward a strategic acquisition by a larger tech company, private equity firm, or cross-border buyer. But as interest rates remain high, valuations remain volatile, and international tensions linger, those deals are harder to land.
Exit Structures in Tech Startup Acquisitions
From a legal standpoint, this shift requires a recalibration of how startups structure for exit. Acquirers are conducting more extensive due diligence, paying closer attention to IP ownership, litigation history, regulatory risk, and employee equity structures. Founders expecting an acquisition must now ensure their legal house is not just clean but proactive. That means defensible intellectual property, enforceable contracts, sound data privacy compliance, and clarity on capitalization.
At the same time, buyers are increasingly looking to de-risk their acquisitions through asset deals, earnouts, and complex post-closing performance arrangements. This is a sharp departure from the cash-heavy or stock-based acquisitions of the previous tech boom. For sellers, it means more scrutiny, longer deal cycles, and a higher need for skilled legal negotiation.
For companies with dual exposure to international markets—particularly those with supply chains or user bases connected to China—the volatility caused by current tariff and trade policy is yet another complicating factor. In tech verticals such as AI, robotics, hardware, or logistics software, political uncertainty may directly affect deal certainty. Acquirers want to know: what exposure does this startup have to changing regulations or economic pressure points?
Despite the slow pace, deals are still happening. Some acquirers, flush with cash, are quietly pursuing opportunistic acquisitions at more favorable valuations. But for the average startup, the path to a clean exit in 2025 involves more patience, more transparency, and significantly more legal and strategic planning.
For founders and boards, the question becomes not just whether an acquisition is possible, but whether your company is structured to survive an extended waiting game. That may mean extending runway, optimizing for profitability, or considering strategic partnerships in the interim. It may also mean filing key trademarks now, reviewing licensing agreements, and preparing for diligence with clear documentation of ownership and compliance.
Tech Startup Acquisitions Attorney
At L.A. Tech and Media Law Firm, we work closely with growth-stage startups and their advisors to prepare for successful exits, including through tech startup acquisitions. This includes negotiating NDAs and letters of intent, conducting internal legal audits, reviewing equity and option structures, and navigating platform terms and IP exposure in advance of a transaction. You can learn more about our M&A readiness and startup legal strategy services here.
The tech startup acquisitions market in 2025 may not be the surge many hoped for, but it’s far from dead. Deals will continue to close—but only for startups that are legally and operationally ready, and for acquirers who can stomach a more complex risk landscape. In many ways, this environment favors precision, discipline, and legal maturity—qualities that were often overshadowed during the last speculative boom.
David Nima Sharifi, Esq., founder of L.A. Tech and Media Law Firm, advises technology startups, investors, and founders on acquisition strategy, legal structuring, and exit negotiations. Featured in the Wall Street Journal and recognized among the Top 30 New Media and E-Commerce Attorneys by the Los Angeles Business Journal, David brings over two decades of legal insight into the M&A strategies that work in both bullish and cautious markets.
Schedule your confidential consultation now by visiting L.A. Tech and Media Law Firm or using our secure contact form.
