Early Exits Update

This was the opening keynote at the 2015 Colorado Capital Conference.

The Denver / Bolder area is one of several technology communities where angels and entrepreneurs have somehow developed a deeper appreciation for the importance of early exits. It’s going to be interesting to see if we can track the difference this makes.

Key Points:

  • The popularity of the Early Exits book surprised me
  • I want to start by emphasizing that:
  • Early Exits is not a theory, “entrepreneurial preference” or a “portfolio strategy”
  • It’s a “macro-economic observation”
  • We understand now that the early exits trend is being driven by the convergence of:
  • 1. The Internet
  • 2. Changes in big companies
  • 3. Changes in startups
  • 4. Changes in the global economy
  • 5. Possibly even changes in our species
  • Case study – the Pacinian Exit
  • I believe an early exit is best for something around 98% of startups

Questions:

  • How can a company execute an early exit?
  • What does it mean to say a company should be sold, not bought?
  • How can we use this in our deal selection criteria?
  • The difference between early exits and unicorn hunting
  • Someone has to have the job of watching your M&A market
  • What do you think about the increase in pre-money valuations?
  • Rob Wiltbank’s research: the median exit is around $15 million
  • Should startups file patents and how should we align the timeline?

The PowerPoint for this talk is online here.

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