From my perspective, Braintree had a good brand ( compared to paypal), locked-in customer base and sizeable cashflow (my conjecture based on their fees). Incumbents and first movers in this industry have a huge advantage over newcomers - so they were not as much at risk from newer start-ups. They were also risk averse in how they accepted new customers .
Could they not have restructured, focused on serving their existing customers rather than chasing growth, maybe downsized a bit, and gone for the long run viability with an IPO in about 5 years?
They took on a lot of VC and there is no way that an IPO would have valued Braintree at the level that PayPal did. With the amount of investment they took on, they needed an acquisition of at least 500-750 million to get the 10x return their investors expected.
In short, when you take on enough investment, your options are IPO or acquisition, whatever makes your big investors the happiest.
Braintree's 2011 revenue (from their Inc 5000 listing) was $9.9M. A $800M buyout is the equivalent of 80 years of future revenue. That's a lot of cash to turn down.
From my perspective, Braintree had a good brand ( compared to paypal), locked-in customer base and sizeable cashflow (my conjecture based on their fees). Incumbents and first movers in this industry have a huge advantage over newcomers - so they were not as much at risk from newer start-ups. They were also risk averse in how they accepted new customers .
Could they not have restructured, focused on serving their existing customers rather than chasing growth, maybe downsized a bit, and gone for the long run viability with an IPO in about 5 years?