Early Exits Overview

Early Exits Overview

Presented at the ACA New England Angel Education Series – Boston, MA December 6, 2010.

The PowerPoint for this talk is available here.

To host an Early Exits Workshop for your group, please contact Chris Major at the Angel Capital Education Foundation.

Early Exits Overview – Part 1:

Early Exits Overview - Part 1

  • Much of what you hear about exits is wrong – dangerously wrong. There are so many myths and misperceptions.
  • And quite a few dirty secrets. This workshop is about what works today when you want to sell a business.
  • Angel investing is still quite new – about where traditional Venture Capital was in the early 1980s.
  • The economy has changed – a lot. That is part of the reason that traditional Venture Capital doesn’t work anymore.
  • When does it actually make sense for a company to take an investment from a traditional venture capital fund?
  • Why exits today are under $20 million and why Google wants even earlier exits.
  • Big companies aren’t the only buyers – there are several different types of buyers active in the market today.

Early Exits Overview – Part 2

Early Exits Overview - Part 2

  • Startup economics have changed. It’s now possible to build valuable companies for only $100,000s, or even $10,000s.
  • The internet has accelerated everything – many big exits have occurred just two or three years from startup. Here’s a list.
  • How early can you sell a business? Selling in 2 or 3 years is often the optimum time to sell a company.
  • The exit is just another business process – just like a product development or financing.
  • Every company needs a clear, written, signed exit strategy. It doesn’t have to be complicated.
  • Often the biggest question is not “How much can sell for?” it’s “How long will it take to sell?”
  • Companies should be ‘sold’ not ‘bought.’

Early Exits Overview – Part 3

Early Exits Overview - Part 3

  • Negotiating and closing the sale – even after you have a signed agreement, it can take 1 to 3 months to close.
  • The ideal exit team – the CEO, the M&A advisor, accountants, lawyers and possibly an exit coach.
  • Selecting the M&A advisor and M&A advisor’s fees.
  • Building shareholder value and maximizing the selling price.
  • This is a ‘golden era’ for technology entrepreneurs and angel investors.
  • The ‘new’ angel model and resources on exits.

You can also watch this video series on YouTube, starting with Part 1 here.

Many of these lessons are described in my new book on selling businesses for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Selling a Business Guide, Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

It’s the Angels’ Time Part 3

It’s The Angels’ Time – Part 3

Highlights of It’s The Angels’ Time – Part 3:

  • Angel syndication – a fascinating, and important, new trend
  • Angels finance 27 times more startups than traditional Venture Capital funds
  • Startups have created all of the new jobs in our economy for the last thirty years
  • Our 21st century economy – what’s actually working
  • The new angel model and why angels are much smarter today. The professional angel investor
  • What we are doing here is important and what you can do to help

Back to the Overview Page.

Back to the Overview Page.

(You can also view Part 3 on YouTube here)

It’s the Angels’ Time Part 2

It’s The Angels’ Time – Part 2

Highlights of It’s The Angels’ Time – Part 2:

  • What happened to big M&A exits? The dirty secret is they often didn’t work out for the buyers.
  • Selling for under $20 million is easy – here’s why
  • Why this is happening now – the view from the Fortune 500 and Google as an example
  • Big companies have quietly become the VCs worst competitors

Part 3 of this video is online here.

Part 3 of this video is online here.

(You can also view Part 2 on YouTube here)

It’s the Angels’ Time Part 1

It’s The Angels’ Time – Part 1

Highlights of It’s The Angels’ Time – Part 1:

  • The economy has changed a lot. Venture Capital is in trouble. Lot’s doesn’t work anymore.
  • But there is good news: the lower cost of growing startups and
  • Big companies have huge cash reserves and are spending more on acquisitions than R&D
  • There are many buyers for companies in the $10 to 30 million range
  • Companies are often being sold just two or three years from startup – its often the best time to sell
  • This is a golden era for entrepreneurs
  • Successful investing requires two things: investing right and exiting well

Part 2 of this video is online here.


Part 2 of this video is online here.

(You can also view Part 1 on YouTube here)

It’s the Angels’ Time

It’s The Angels’ Time – Opening Keynote Angel Capital Association

San Francisco, May 6, 2010

This speech sparked some fascinating debates and received the highest audience evaluation at the conference.

The PowerPoint for this talk is available here.

It’s The Angels Time – Part 1:

Its The Angels Time - Part 1

  • The economy has changed – lots doesn’t work anymore.
  • But there is good news: the lower cost of growing startups, big companies have huge cash reserves and are spending more on acquisitions than R&D
  • There are many buyers for companies in the $10 to 30 million range
  • Companies are often being sold just two or three years from startup – its often the best time to sell
  • This is a golden era for entrepreneurs
  • Successful investing requires two things: investing right and exiting well

It’s The Angels Time – Part 2

Its The Angels Time - Part 2

  • What happened to big M&A exits? The dirty secret is they often didn’t work out for the buyers.
  • Selling for under $20 million is easy – here’s why
  • Why this is happening now – the view from the Fortune 500 and Google as an example
  • Big companies have quietly become the VCs worst competitors

It’s The Angels Time – Part 3

Its The Angels Time - Part 3

  • Angel syndication – a fascinating, and important, new trend
  • Angels finance 27 times more startups than traditional Venture Capital funds
  • Startups have created all of the new jobs in our economy for the last thirty years
  • Our 21st century economy – what’s actually working
  • The new angel model and why angels are much smarter today. The professional angel investor
  • What we are doing here is important and what you can do to help

You can also watch this video series on YouTube, starting with Part 1 here.

Many of these lessons are described in my new book on selling businesses for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Selling a Business Guide, Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

Early Exits Workshop – Videos

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

PowerPoints from the Workshop: Part 1 | Part 2 | Part 3 | Part 4

Angel Investing in the 21st Century – Part 1:

Early Exits Workshop Videos

  • Successful investing requires two things – investing right and exiting well
  • Angel investing is still new – about where Venture Capital was in the 1980s
  • Why most tech company M&A exits today are under $20 million
  • Companies are often sold just 2 or 3 years from startup
  • When traditional Venture Capital funds invest, it adds about a decade to the exit
  • Why the optimum strategy is to have angel investors or VC funds but not both

Exit Strategy – Part 2:

Early Exits Workshop Videos

  • Focusing on exits is healthy and why companies should be sold not bought
  • Planning for successful exits and why every company needs an exit strategy
  • Angels finance 27 times more startups than traditional Venture Capital funds
  • The exit is just another business process (the most important one)
  • How to plan for an exit, the first step is to determine what type of company you have
  • Seven steps to plan for a successful exit

Exit Execution – Part 3:

Early Exits Workshop Videos

  • Steps to completing a successful exit
  • The ideal exit team and why the CEO should not lead the transaction
  • The roles of the professionals, the M&A advisor, the exit coach, the lawyers, etc.
  • Why most companies don’t do the best job of selecting their M&A advisor and why they should be local
  • M&A advisory fees and why failure is such a common result

Exit Valuation – Part 4:

Early Exits Workshop Videos

  • Exercise to estimate the valuation of three early exits from the BC Tech Fund
  • Two M&A exits and one IPO
  • Parasun, Brightside and MetroBridge

Many of these lessons are described in my new book on exit strategies for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

Angel Investing in the 21st Century Videos -Part 1

Early Exits Workshop Videos, Part 1 of 4

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Part 1 PowerPoint PDF here

Part 1-1 Highlights:

Early Exits Workshop Videos - Angel Investing in the 21st Century - Part 1

  • Outline of the Early Exits Workshop and how I got started on Early Exits
  • Successful investing requires two things – investing right and exiting well
  • Angels and entrepreneurs would have more fun and make more money if we focused more on our exits
  • Angel investing is still new – about where traditional Venture Capital investing was in the mid-1980s
  • The economy has changed and traditional Venture Capital isn’t working for today’s tech companies

Part 1-2 Highlights:

Early Exits Workshop Videos - Angel Investing in the 21st Century - Part 1

  • What happens to angels and entrepreneurs when traditional VCs invest in our companies?
  • When VCs invest, on average it adds about a decade to the exit timeline – the math explains why.
  • The best strategy is to have angel investors or traditional VCs – but not both – university research shows
  • When do traditional Venture Capital investors make sense for technology companies? A simple test for each company.

Part 1-3 Highlights:

Early Exits Workshop Videos - Angel Investing in the 21st Century - Part 1

  • Most M&A exits are under $20 million – because that’s what works for the acquirers in today’s economy
  • The media does us a disservice by writing stories about the really big exits – which aren’t happening as often anymore
  • Examples of these exits and why they are happening now – under $20 million is easy
  • Big companies have lots of cash and are starting to consider traditional VC funds as their competitors
  • Google wants even earlier exits – their sweet spot is under $20 million and they prefer pre-revenue companies
  • There are many other types of buyers today including medium-sized companies and even boomer entrepreneurs

Part 2 is online here.

Many of these lessons are described in my book on exit strategies for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Selling a Business Guide, Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

Angel Investing in the 21st Century – Part 1-1

Early Exits Workshop – Part 1-1

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Highlights of Angel Investing in the 21st Century – Part 1-1

  • Outline of the Early Exits Workshop and how I got started on Early Exits
  • Successful investing requires two things – investing right and exiting well
  • Angels and entrepreneurs would have more fun, and make more money, if we focused more on our exits
  • Angel investing is still new – about where traditional Venture Capital investing was in the mid-1980s
  • The economy has changed and traditional Venture Capital isn’t working for today’s tech companies

Part 1-2 of Angel Investing in the 21st Century is online here.

The Exits Workshop Videos are also available on YouTube.

Angel Investing in the 21st Century – Part 1-2

Early Exits Workshop – Part 1-2

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Highlights of Angel Investing in the 21st Century – Part 1-2

  • What happens to angels and entrepreneurs when traditional VCs invest in our companies?
  • When VCs invest, on average it adds about a decade to the exit timeline – the math explains why.
  • The best strategy is to have angel investors or traditional VCs – but not both – university research shows
  • When do traditional Venture Capital investors make sense for technology companies? A simple test for each company.

Part 1-3 of Angel Investing in the 21st Century is online here.

The Exits Workshop Videos are also available on YouTube.

Angel Investing in the 21st Century – Part 1-3

Early Exits Workshop – Part 1-3

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Highlights of Angel Investing in the 21st Century – Part 1-3

  • Most M&A exits are under $20 million – because that’s what works for the acquirers in today’s economy
  • The media does us a disservice by writing stories about the really big exits – which aren’t happening as often anymore
  • Examples of these exits and why they are happening now – under $20 million is easy
  • Big companies have lots of cash and are starting to consider traditional VC funds as their competitors
  • Google wants even earlier exits – their sweet spot is under $20 million and they prefer pre-revenue companies
  • There are many other types of buyers today including medium-sized companies and even boomer entrepreneurs

Part 2 of the Early Exits Workshop is online here.

The Exits Workshop Videos are also available on YouTube.

Exit Strategy – Part 2

Early Exits Workshop Videos, Part 2 of 4

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Part 2 PowerPoint PDF here

Part 2-1 Highlights:

Early Exits Workshop - Exit Strategy - Part 2

  • Focusing on the exit is healthy and why exits are not well understood
  • Contrary to popular wisdom, companies should be sold not bought – the difference is a lot of money
  • The exit is just another business process (the most important one)
  • How to plan for an exit, the first step is to determine what type of company you have
  • Seven steps to plan for a successful exit

Part 2-2 Highlights:

Early Exits Workshop - Exit Strategy - Part 2

  • Angels actually finance 27 times more startups than traditional VC funds
  • The importance of a clear exit strategy before contacting the first external investor
  • Checking the DNA compatibility of prospective investors before they invest
  • Angel syndication – companies are now raising $5 to 10 million angel investors
  • The importance of term sheets in planning for successful exits
  • Why share and option vesting is critically important to company success
  • The challenges in building good quality boards and how that is affecting term sheets
  • The Dan Rosen “Preferred Light” term sheet – a new standard for angels

Part 2-3 Highlights:

Early Exits Workshop - Exit Strategy - Part 2

  • Angels as financial partners – how angels can help entrepreneurs more
  • Angels can help the most with financing, structuring, governance and exits
  • Other videos on planning exits

Part 3 is online here.

Many of these lessons are described in my new book on exit strategies for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

Exit Strategy – Part 2-1

Early Exits Workshop – Part 2-1

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Highlights of Exit Strategy – Part 2-1

  • Focusing on the exit is healthy and why exits are not well understood
  • Contrary to popular wisdom, companies should be sold not bought – the difference is a lot of money
  • The exit is just another business process (the most important one)
  • How to plan for an exit, the first step is to determine what type of company you have
  • Seven steps to plan for a successful exit and building alignment on the exit strategy
  • Why boards might want to consider a secondary sale and what it takes to have a successful secondary

Section 2-2 of the Early Exits Workshop is online here.

The Exits Workshop Videos are also available on YouTube.

Exit Strategy – Part 2-2

Early Exits Workshop – Part 2-2

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Highlights of Exit Strategy – Part 2-2

(includes Part 2-2 and 2-3 of the PowerPoint)

  • Who actually finances today’s startups? Angels actually finance 27 times more startups than traditional VC funds
  • Why it is important for companies to have a clear exit strategy before contacting the first external investor
  • The importance of checking the DNA compatibility of prospective investors before they invest
  • Angel syndication – an important new trend – companies are now often raising $5 to 10 million all from angel investors
  • The importance of term sheets in planning for successful exits – new thinking on angel term sheets
  • Why share and option vesting is critically important to company success, drag alongs in term sheets
  • The challenges in building good quality boards today and how that is affecting term sheets
  • The Dan Rosen “Preferred Light” term sheet – a new standard for angel investor term sheets

Section 2-3 of the Early Exits Workshop is online here.

The Exits Workshop Videos are also available on YouTube.

Exit Strategy – Part 2-3

Early Exits Workshop – Part 2-3

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Exit Strategy – Part 2-3 (starting at Section 2-4 of the PowerPoint):

  • Angels as financial partners – how angels can help entrepreneurs more
  • Angels can help the most with financing, structuring, governance and exits
  • Other videos on exit strategies

Part 3 of the Early Exits workshop is online here.

The Exits Workshop Videos are also available on YouTube.

Exit Execution – Part 3

Early Exits Workshop Videos, Part 3 of 4

Sponsored by the Angel Capital Education Foundation and the Angel Capital Association
…presented at the Angel Capital Association National Summit, San Francisco May 5, 2010

Part 1 PowerPoint PDF here

Part 3-1 Highlights:

Early Exits Workshop - Exit Execution - Part 3

  • Ways we can increase successful exits and the eight steps to executing an exit
  • The ideal exit team and why the CEO should not lead the transaction
  • The roles of the professionals, the M&A advisor, the exit coach, the lawyers, etc.
  • Why most companies don’t do the best job of selecting their M&A advisor and why they should be local
  • M&A advisory fees and why failure is such a common result

Part 3-2 Highlights:

Early Exits Workshop - Exit Execution - Part 3

  • The exit timeline – why the first question is often “How long will it take?” The honest answer to how long it usually takes
  • Timing is important, when to tell the team, things to do before contacting the first buyer
  • Building the sales funnel, the auction and bidding process, negotiating and closing

Part 3-3 Highlights:

Early Exits Workshop - Exit Execution - Part 3

  • Cleaning up the company and preparing to exit – essential steps before contacting prospects
  • Corporate records and taxes, the share register, review or audited financials?
  • The importance of modern, up to date employment agreements and contractor agreements
  • The essential sales collateral, due diligence online, the teaser, the selling document, numbers and possibly a video

Part 3-4 Highlights:

Early Exits Workshop - Exit Execution - Part 3

  • Maximizing the selling price and building shareholder value, planning to over-achieve
  • Several ‘non-operational’ ways to increase the final selling price
  • Structural value increase, illuminating strategic value, the benefits of multiple bidders, selling and negotiating skill
  • Why the reps and warranties are the ‘scariest part’, closing the deal and life options after you sell
  • Videos and other resources on executing good quality exits

Part 4 is online here.

Many of these lessons are described in my new book on exit strategies for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

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