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Case Studies, Early Exits

Pacinian – The Interview Videos

by Basil Peters on August 13, 2013 · 5 comments

It’s rare to be able to post a detailed case study on an early exit. The most interesting information is usually restricted by a non-disclosure agreement. This is a very valuable opportunity to hear directly from the Chairman and a lead investor about what went on behind the scenes in this $30 million pre-revenue exit.

These videos complement the complete written case study.

Highlights of Part 1 – Johnny Humphreys and Basil Peters:

  • The original idea and Pacinian’s mission.
  • How far did the company get?
  • Company sold before the product is in production?
  • Pacinian’s $6 million of angel funding.
  • Developing the exit strategy.
  • Attending the Exit Strategies Workshop.
  • It requires discipline. What might have happened.
  • Many shareholders thought it was impossible.
  • Who is really in charge during the negotiations?
  • The exit timeline – how long did it all take?
  • Congratulations Pacinian! A very successful outcome.

Highlights of Part 2 – Johnny Humphreys and Basil Peters:

  • Valuation is always a challenge.
  • Profile of the successful buyer.
  • It was the “worst kept secret”
  • $30 million cash for a company that was pre-revenue!
  • The company set the price – not the buyers.
  • Pacinian had several strategic options:
  • Venture capital funding, licensing offers and moving to production.
  • Similarities to the Brightside exit (case study here).
  • Early Exits are optimum for most companies.

Highlights of Part 3 – Bill Payne and Basil Peters:

  • This was not Silicon Valley.
  • The Pacinian investments from the angels’ perspective.
  • The Early Exits Strategy and book.
  • Initial stakeholder skepticism about an Early Exit.
  • At The Exit Strategies Workshop.
  • Building the alignment – a critical need.
  • A $30 million Early Exit – pre-revenue.
  • The Frontier Angel Fund in North West Montana.

For more on the Pacinian exit, here’s the complete case study.

{ 4 comments… read them below or add one }

Roger Killen August 23, 2013 at 4:27 pm

Hi Basil,

This Pacinian Exit case study is enormously helpful to startup ecosystem players because it is inspiring and filled with ‘how-to’ guidance. Your video trilogy is an outstanding contribution to angels everywhere. I thank and congratulate you.

Roger Killen

Reply

Basil Peters August 23, 2013 at 4:31 pm

Roger,

Thank you very much for your kind words.

I’m pleased you think this story be valuable to the startup ecosystem.

We need more startups and more exciting exits!

Basil

Reply

Bill Houston September 4, 2013 at 5:11 am

It seemed like a critical ingredient to the exit strategy was getting a consensus around the various exit scenarios’ valuations. How did you develop those numbers with a degree of confidence high enough to convince others on the board?
An extraordinary set of videos.

Reply

Basil Peters October 6, 2013 at 7:24 am

Hi Bill,

You are absolutely correct – it is a critical ingredient. Unfortunately, the answer to your question is that it is not easy to develop the exit valuation and timeline with enough confidence to convince the board and shareholders.

Part of it is having the personal experience to know that the valuation and timeline are achievable.

Sometimes it feels like the rest requires a PhD in Psychology.

Thanks for your positive feedback – I’m glad you found the Pacinian Case Study valuable.

Basil

Reply

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