by Basil Peters | September 1, 2008 | 2 Comments
Whenever I hear an entrepreneur, or angel investor, say “early exit” they have a really big smile on their face. Even some of my VC friends beam when they talk about the jump in their returns if they've gotten lucky with an early exit. In my experience, almost everyone wins in an early exit – the entrepreneurs, the employee share and option holders and the angel investors certainly do. I do acknowledge there are times when early exits are not...Read More
by Basil Peters | August 1, 2008 | one response
Companies are being acquired at earlier and earlier stages – often just 2 or 3 years from startup. Why is this happening now? A large part of the answer is that this is another natural consequence of the internet - part of the development of our economy and the evolution of our species. There are some excellent early exit stories in BC. Early exits helped make my Read More
by Basil Peters | July 15, 2008 | no responses
The graphic below is an attempt to illustrate the value creation stages in a typical technology company:
- 10% for locating the target company and completing the transaction.
- 40% from the value-added by contributions to the strategy and ongoing corporate governance.
- 50% for the value created from the strategy and execution of the eventual exit—or sale of the company.
by Basil Peters | July 1, 2008 | no responses
We are better at early exits in BC and Alberta than in any other province in Canada or state in the US. This conclusion came from an excellent research study led by Thomas Hellmann at the UBC Sauder School of Business. This was a significant research project conducted to the highest academic standards. Thomas and his colleagues analyzed 509 exits of Canadian venture capital backed companies that generated a total exit value of $30 billion and compa...Read More
by Basil Peters | June 1, 2008 | one response
I started my first company, Nexus Engineering, when I was still a grad student. A little over ten years later, the board decided it was time to sell. The company was the second largest manufacturer of cable TV headends in the world. The number one and number three in our vertical were Fortune 500 companies.
Our Exit StrategyOur exit strategy was to sell our company to a Fortune 500 company in the defense business. At that time th... Read More
by Basil Peters | May 1, 2008 | no responses
This is a very good time to sell your technology business - so good you might want to accelerate your exit strategy. There is an interesting article in the April 7, 2008 issue of Business Week titled “Ravenous for Small Tech”. The article reports that while the change in value of mergers and acquisitions in 'all sectors' is down 51% in 2008, compared to last year, the value of 'high technology' M&A is actually up 132%. In a May 2008 ar...Read More