Start at the End - Your Exit Strategy - presented at the 2009 New Ventures BC Seminar Series

Part 1 - Click here.

Highlights of Start at the End - Your Exit Strategy - Part 1:

• Your exit is the culmination of all the hard work you do as an entrepreneur.
• Investors are easy to understand - we think of your company as a simple black box.
• The truth about investors - we are a pain in the a__s!
• The big new story is the large number of smaller M&A transactions.
• How big companies grow. Why this is exceptionally good news for entrepreneurs.
• M&A exits are happening earlier than ever before.
• You don't need to grow your company to any specific size before you sell it - it doesn't even have to be profitable.
• All you need to do before you can sell is to 'prove the model'.
• The best time to sell is probably earlier than you think.
• Please don't make the mistake I did - don't "ride it over the top" and wait too long.

Part 2 - Click here.

Highlights of Start at the End - Your Exit Strategy - Part 2:

• Do you even need investors to make it big today?
• Why this is a golden era for entrepreneurs.
• The whole game for entrepreneurs has changed - very valuable companies are being built for $tens of thousands.
• Why your first choice should be to bootstrap if you possibly can.
• If you really do need capital, what are your options?
• The classic view of the venture capital industry and what it looks like today.
• The new phenomena of angel funds.
• Angel group syndication - angel groups are now investing as much as $5 to 10 million in some companies.
• Angels finance 27 times more startups than traditional Venture Capital funds.
• Angel investors invest about the same amount as traditional Venture Capital funds - about $20 billion in the US.
• Friends and Family investors invest much more than angels or VC funds.
• There is no shortage of capital today - despite what you might have heard.

Part 3 - Click here.

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 entrepreneurs should "start at the end" when they build their companies.
• 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.
• The exit is just another business process - like a sales plan, financing plan or product development plan.
• Exit strategies can be very simple - often just a few sentences.
• The important thing is to formally check the alignment - at least annually.
• New understandings on the differences between angel investors and traditional Venture Capital funds.
• The most important differences are all related to the exit.
• 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.

Part 4 - Click here.

Highlights of 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 invests to an exit is about 7 years.
• But that actually means, that on average, you will be stuck in your company for about 12 years after the VCs invest.
• 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.
• New 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.