Start at the End Your Exit Strategy Part 3

BY Basil Peters

Start at the End – Your Exit Strategy – Part 3

Highlights of Start at the End – Your Exit Strategy – Part 3:

  • Why you need an exit strategy right from the beginning – and certainly before you contact your first prospective investor.
  • Why it is essential to check the DNA compatibility before you accept money from investors.
  • How a mistake with DNA compatibility can be fatal and how I almost lost my first company to the VCs.
  • Developing an exit strategy – the most important element in your business plan.
  • Many companies have exit strategies even though sometimes the entrepreneurs don’t know it.
  • The exit strategy affects operational decisions on almost a daily basis.
  • The exit is just another business process – like a sales plan, financing plan or product development plan.
  • The exit strategy is the plan for the entire business.
  • Start at the end – ask yourself what you want to do with your company.
  • Exit strategies can be very simple – often just a few sentences.
  • The important thing is to formally check the alignment and get it signed off – at least annually.
  • It is surprising how often a company can have a serious mis-alignment but not realize it until the exit is imminent.
  • A two day offsite, strategic planning retreat is usually required to build the first aligment on the exit strategy.
  • New understandings on the differences between angel investors and traditional Venture Capital funds.
  • The most important differences are all related to the exit.
  • Traditional Venture Capital funds have exploded in size.
  • This forces VCs to put way too much money into each company – why this is bad for entrepreneurs.
  • Accepting money from a traditional Venture Capital fund adds about a decade to the exit timeline.
  • The unwritten contract between entrepreneurs and traditional Venture Capital investors.
  • Why a traditional VC might not let you sell your company for less than $100 million.

Part 4 of this video is online here.

Many of the lessons I’ve learned are described in my new book on exit strategies for entrepreneurs and angel investors –

Part 4 of this video is online here.