3. Most Entrepreneurs Have Unrealistic
Expectations of Exit Values
IIcan always get
can always get
acqui-hired for
acqui-hired for
15 million bucks
15 million bucks
5. Of course itâs much harder
than that â but you
wouldnât know it from the
press
6. Most VCs Donât Have a Strong Sense of
Exit Values Either. Itâs Not Only HRs
7. The Fallacy of Bimodal Returns. Great
Funds Often Built in the Middle
Source: USV return
data per AVC.com
8. The Reality Is - There Arenât Many VC
Exits > $100 million
Source: Capital IQ
And Many of These Raised Huge Sums of Money so Returns Arenât Clear
16. As a VC We Try to Lean in Early on
Winners & Avoid âThe Mark Up Gameâ
ownership %
3
Get
2
30% Ownership
in Solid
Performers
1 Lean Early
on 20-25%
20%
Big Winners
Small Initial
Check
10%
$0.5 $2m $4m $8m
Total investment ($m)
17. âFat is good when youâre on to something
really special, but âŠ
Sometimes NOT Having a Big VC Above
you in the Cap Table is a Great Thing for
both VC & Entrepreneurâ
It Keeps a lot More Options Open
Source: Mark Suster. Having been burned before by misaligned incentives on exits
19. Companies Are Bought, Not Sold
ï± PR Matters. I know. It shouldnât.
It does.
ï± Get Biz Dev or Sales Deal
People buy people they know.
ï± Start Early. Need to Take Early
Meetings (just like raising VC)
ï± Leverage VCs. Corp Dev use as
a quality filter
ï± Use Banks Wisely. Some deals
fees nothing compared to price
increase, closure %. But bank
must have skin in the game.
20. Need to Know What Type of Acquisition
You Would Be
Value to Acquirer Defensive
Move
ï§ Canât Afford to
Strategic
Have A
Threat
Competitor Own
ï§ Avoid or Delay
Revenue Disruption
Driver
Product
Gap
Talent
Hire
ï§ $1m / Dev
ï§ Location Matters
Purchase Price
21. Organizational Purchases
Champion Beat You
You Up
Sell Your Product Business Buyer IT Depât Legal / Finance
Sell Your Company Sales Product Corp Dev
In some companies Corp Dev leads strategy / investments. In others they
are the deal execution teams. Know your buyer.