Start at the End Your Exit Strategy Part 4

Start at the End – Your Exit Strategy – Part 4

The Unintentional Moonshot – 92% of exits don’t work for traditional Venture Capital funds.
In the 1990s the time from VC investment to exit was only 2 or 3 years.
Today, the median time from when a VC fund invests to an exit is about 7 years.
But that actually means, on average, you will be stuck in your company for about 12 years after the VCs invest.
That doesn’t seem possible. Aren’t most VC funds only 10 year funds?
The truth is that the average VC lifetime is closer to 15 years now (for technology VC funds).
This means entrepreneurs and angel investors have two choices:
- angel investors and an exit in 3 to 5 years, or
- traditional Venture Capital funds and an exit in 10 to 14 years
Why angel investors are much better aligned with entrepreneurs than traditional (big) Venture Capital funds.
The first data to show this effect comes from Professor Rob Wiltbank.
Fascinating new insights from mining the Brobeck law firm’s data.
This research shows that when Angels and VCs invest together it doesn’t work out as well.
Companies backed by angels alone are just as likely to have successful exits as VC backed firms.
Statistically, entrepreneurs should pick angels or VCs – but not both.
Checklist to determine whether your company would be better off financed by angels or VCs.
Conclusions for entrepreneurs and your optimum strategy for success.

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