Improving Returns for Angels and Entrepreneurs – Element8 Angels, Seattle

BY Basil Peters

This video is a talk I gave at the Element8 angels workshop in Seattle: Investing a World With Few Exits.

Some of the key points from my talk:

  • I believe only 25% of all companies that could have been sold actually end up successfully exiting
  • If a company misses the ideal time to exit, then the most likely result is that it will fail completely
  • After seeing this happen over and over again I started to recognize a few patterns
  • I’ve identified five categories of these failure mechanisms:
  • Over-investment by VCs
  • Competition
  • Intellectual property infringement
  • Negative momentum
  • Waves of Consolidation
  • This talk describes in detail the failure mechanism due to patent infringement
  • In my opinion, if you have a good patent,the only reasonable strategy is to sell the company
  • As soon as possible after the patent is granted,
  • Or when you have disclosed the technology – whichever is sooner
  • If you are a small company, the risks of owning a good patent are not a reasonable business, or investing, decision