Morgan Reed, president of ACT | The App Association, statement on the announcement that Amazon and iRobot agreed to terminate Amazon’s pending acquisition of iRobot:
“For our members and fellow innovators, acquisition is a critical path for future growth. Today’s announcement that Amazon is being forced to terminate the acquisition of iRobot is a dangerous signal to entrepreneurs and financial backers that opportunities to succeed are being artificially limited.
“A barrier to exit is a barrier to entry. When entrepreneurs in the EU or anywhere else across the world can’t get acquired, they have a much harder time getting funding in the first place. Blanket government restrictions on companies being acquired dim opportunities for our members. As financial conditions narrow borrowing opportunities, the timing is especially bad for government to limit acquisition paths as well.
“We are witnessing the unfortunate results of this approach today, as iRobot is in the nightmare scenario dreaded by our companies. The current financial conditions make it hard to continue the dream, so finding a partner to keep the project going through acquisition becomes the only way to keep from defaulting on loans, and hurting everyone who has put time, energy, and money into a small company.
“Our members look to acquisitions as a key part of building their future. Today’s announcement is devastating for small companies hoping to join another company, grow the product they have poured their lives into, or to give back to the families that have taken risks and supported them for years.”