.jpg)
The Story
In 2024, Audiboard became the largest Southern California enterprise software exit of the past decade.
"An Auditing Startup Produced 2024’s Biggest VC-Backed M&A Exit. Who Could Be Next?"
Crunchbase, 2024
Founded in 2014, Auditboard is a unified and intuitive audit management platform where enterprises can automate, manage, collaborate, and report on risk and controls data in real time without thousands of spreadsheets and shared folders. Clients for AuditBoard (PKA SOXHUB) include Intuit, Apple, Pinterest, Airbnb, TripAdvisor, Deloitte, Zynga, Lionsgate, and Intel.
Act One led the seed round in 2016, partnering with founders Daniel Kim and Jay Lee.
The Numbers
$1.5m Investment
$65m Returned across multiple secondary share sales and the final exit
43x Multiple on Invested Capital (MOIC)
236x Return on Initial Investment
2.6x DPI in Fund I with Auditboard Sale
Validation of Act One's Model Approach
We invest in founder-market fit and capital-efficient companies.
Auditboard co-founders Daniel Kim and Jay Lee chose Act One to lead their seed round because of our experience as founders who could be of direct and practical help with building an enterprise software company.
When others passed due to total addressable market (TAM) not "big enough" for a "VC-scale return", we saw an opportunity to lock in that smaller TAM while working on a bigger platform that would help it expand into the larger market for compliance and internal audit tools.
As founders, we learned that access to capital was never easy and what matters is being fundamentally sound so you can survive a downturn. At the end of the day, the only vlaue that matters is the exit value.
Evolution and Growth of Act One Partners
We have always been founders; now we're also asset managers.
There are lots of VCs who now come from the background of being a founder, a difference from when we launched Act One in 2016. But what we have proven over this time is that not only are we founders, we are also asset managers. Over eight years we managed this asset with a scalpel, making sure that each opportunity that arose for liquidity was one where we carefully thought through what was best for our LPs from a timing, cash, and asset management perspective. Through human capital selection of the founders and asset management precision of the shares, Fund I stands in the top decile for the 2016 vintage year based on Pitchbooks's Q4 2024 benchmark data.
This transaction is the larges ever sale of a VC-backed software business by a private equity sponsor.
Timeline
Mar 2016: Act One leads seed round at $200k
Jan 2017: $300k bridge investment before Series A
Mar 2017: Strategic investor-led Series A closes
July 2018: Battery Ventures-led Series B closes
- Act One SPV invests $485k
- Act One Ventures invests $1.01m
Nov 2019: Secondary shares sale
- Act One sells portion of shares to return 0.2x DPI
Sept 2020: Auditboard valuation reaches $1.4b after Tiger Global and Dragoneer buy secondary shares
Oct 2021: Act One sells approximately $20m in shares to Meritech at $3b valuation
Apr 2022: Act One sells approximately $21m in remaining Series A shares to Dragoneer at $2.5b valuation
- Act One retains more than $15m of fair market value Series B shares that hit 5-year QSBS qualification in 2023
May 2024: HG buys Auditboard for $3.1b in cash
- Scale: 2,000+ customers, $200m+ ARR, 800 employees
- Category Leader: ~50% of Fortune 500 served
- Growth: 40% YoY growth, ~120% NDR, $10m Net Income in 2023
