Exit Strategies (Waterloo) Part 1: Exit Strategies

BY Basil Peters

Strategic Exits Partner Emeritus, Dr. J. Basil Peters, developed and implemented several new concepts in selling technology companies. His seminal publication: Early Exits demonstrated that entrepreneurs and their angel investors could earn better returns by selling their technology companies earlier in their business development. He also promoted the concept that the company exit was a key business process and should drive the company’s strategic and operational plans.

In this series of five posts on Exits Strategies, Basil explains the key considerations in developing an exit strategy for your technology company.

This Exit Strategies workshop was first presented at the Golden Triangle Angel Network in Waterloo, Ontario on May 8, 2015. It has since been presented dozens of times to angel and entrepreneur associations around the world.

EXIT STRATEGIES PART 1 – MOST TECHNOLOGY EXITS FAIL TO COMPLETE

For many years, the technology industry operated on the premise that entrepreneurs should start a company based on a tech innovation, finance its growth with family, angels and venture capital, and scale it over many years. The exit would take care of itself at the right time, and the entrepreneurs should not spend any time on it that could be better spent growing the business.

This naïve thinking probably cost entrepreneurs and their investors billions of dollars in lost opportunity through poorly conceived, timed and managed exits. Many companies went broke in the process.

Fortunately, in the last decade or so, the industry has come to appreciate that a carefully planned and executed exit is more likely to succeed and generate substantially better returns. Basil was a pioneer in this effort. In this video, Basil Peters explains his thinking on the need for an exit strategy. His talk covers the following points:

• 75% of the time, when we build a tech company that could have been sold, we blow it and fail to successfully exit.
• Worse – when a company fails to exit at the optimum time there is a high probability that the company will go out of business.
• Hard data on the relative success rate of tech company exits is difficult to find.
• The good news is that with a well-prepared strategy, we can significantly improve the success rate.