Exit Execution Workshop (Philadelphia) Part 3: What does this mean for you?

BY Basil Peters

Exit Execution Workshop (Philadelphia) Part 3: What does this mean for you?

This is the third in a series of eight posts on Exits Execution – the Philadelphia Series. In this session, Basil explodes some of the myths around the theory of exits.

The Exit Execution series follows the Exit Preparation presentation and Exit Strategies – The Waterloo Series available on the exits.partners blog.

The Exit Execution workshop was first presented at the Angel Capital Association Annual Summit in Philadelphia on May 9, 2016.

EXIT Execution – THE Philadelphia SERIES

A considered strategy, diligent preparation and disciplined execution are key to a successful exit. The more experience you can bring to the exit process, the better chance that you will be among the relatively few, 25% of exits that achieve their goals. As this knowledge of exits is disseminated and practised, the success rate should increase.

Some of the most basic information is wrong. The oft-repeated fable that companies are bought, not sold, is a prime example. If you are supremely lucky, a buyer may happen to find you just as you are ready to sell. But would you bet your company on this happenstance? Far better to plan and execute your exit with the assistance of experienced advisors based on an analysis of your company’s value proposition, the profile of an idea buyer, and a rigorous search for potential acquirers. This is the process in which companies are sold, not bought. It is usually more successful.

Basil explains a key element in the execution of a successful exit: alignment. This topic is fundamental but rarely considered. The key stakeholders can work side by side in a company for a long time without realizing that they either have not considered how to exit or have very different ideas on the timing and strategy. It is vital to a successful exit that any mis-alignments among the stakeholders be surfaced and resolved at the outset. If there are lingering issues then it is almost certain that the exit will fail. Often the failed exit will take down the company with it.

A comprehensive exit strategy drives the company’s business plan, financial plan and operations plan. It considers the company’s value proposition, the state of the economy and the M&A markets. The exit strategy is the key document around which all of the other plans are built. Developing the exit strategy will expose any mis-alignment among the stakeholders with respect to the exit and all of the other dependent business processes.

By considering all of the elements, planned exits are usually more successful.