Early Exits Overview – Boston

BY Basil Peters

This was an overview of the Early Exits workshop presented at the ACA New England Angel Education Series – Boston, MA December 6, 2010.

There’s a vibrant angel community in Boston that is passionate about angel education.

Part 1 – Much of What You Hear is Wrong:

  • 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.

Part 2 – So Much Has Changed:

  • 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.’

Part 3 – Designing and Executing Exits::

  • 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.

The PowerPoint for this talk is available here.