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What Every Startup And Corporate Should Know About Exits
The document outlines key insights into startup exits, highlighting the significance of mergers and acquisitions (M&A) for both startups and corporates. It discusses the vital statistics of the startup ecosystem, including the structure of funding, common exit strategies, and factors influencing the timing of exit opportunities. Additionally, it emphasizes the importance of preparation, active engagement, and strategic visibility to maximize exit potential and outlines best practices for both founders and corporates in navigating the acquisition landscape.
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What Every Startup And Corporate Should Know About Exits
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- 2. GLOBAL DEEP TECHSEED FUND $525M under management 800+ investments (+150/year) #3 most active globally #1 in Health Tech / IoT / Life sciences HANDS-ON CAPITAL Focused accelerators Pre-seed: $100k-$250k Follow-on: up to $2M About SOSV SOSV PROGRAMS Hardware HAX (SF, Shenzhen) Biotech IndieBio (SF) RebelBio (London) Social & Mobile Chinaccelerator (Shanghai) MOX (Taipei) Food Food-X (NYC) Blockchain dLab (NYC)
- 4. 4 JUMP BIKES Uber, $200M HARMONIX MTV,$175M Makeblock (val. $367M) Memphis Meats (Gates…) BitMEX Formlabs GetAround Some SOSV Startups
- 5. We want 800exits
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- 10. The pom-pom, andthe fear of missing it. After that, nothing else matters.
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- 13. Founders get paid Investorsget paid
- 14. We need tolearn
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- 17. Founders, CFOs, VCs,corporates, bankers, lawyers, stock exchanges…
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- 22. Startups should prepare ormiss opportunities and leave money on the table Lesson One
- 23. Lesson Two Corporates willneed M&As to stay relevant, and should build a playbook
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- 25. Some Facts Most exitsare M&A Most are < $100M 2-3 years after first contact
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- 29. VC-Backed Exits in 2017(US & EU) IPO $13.5bln 114 deals 9% PE Buy-Out 18.5% M&A $67bln 1,265 deals 72.5% 1/3 above $100mln 88.7% of exit value Source: PItchbook, 2017 data
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- 31. FOSO Fear ofSelling Out
- 32. FOSO Save years oflife, stress, and risk Get ‘Exit / Bankable’experience It’s easier next time It’s NOT what most VCs want
- 34. FOSO Myths 01/ It’sa shame not to build a unicorn 02/ It’s a shame to sell early 03/ You can’t get rich quick 04/ Corporates are boring
- 36. Corporate CEO says: ‘We’rebuilding a new and huge division around startupA. The CEO of startupA will be its leader.’
- 37. Cisco case 1/3 topleaders from M&A 100 CEOs at Cisco !
- 38. When NOT toexit? Revenue / profit Massive momentum Strong confidence in next 2-3 years Everyone is pumped up! + Softbank won’t invest in your competitor
- 39. When to exit? Worsttime? Best time?
- 40. Worst time(s) No money Nogrowth No morale
- 41. Best time(s) Buyer ‘needs’you Consolidation Fastgrowth (with perceived cap)
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- 43. Why buy you? Talent Market Technology Competitor Complementsegment Complement geography Next gen
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- 46. My first M&A 123Multimedia For-Side Mobivillage Index
- 47. FitnessApps UnderArmour $475M MyFitnessPal Asics$85M RunKeeper UnderArmour $150M MapMyFitness Adidas $239M Runtastic Fitbit $18M Fitstar $1B
- 48. Social Games Disney $563MPlaydom DeNA $400M ngmoco ElectronicArts $750M PopCap ElectronicArts $400M Playfish Zynga $210M OMGpop $2B
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- 52. Angel case 2010:Angel +Seed 2011:A 2013: B 2015: C 2019: M&A
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- 54. “Good tech companies arebought, not sold. The question is thus: how to get bought?” George Patterson HSBC
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- 57. Due diligence IP ownership StaffContracts Client contracts Product plan …
- 58. No plan B Onebidder 6 months of distraction Slow BD, No fundraising
- 59. Risks Missing the exit Leavingmoney on the table
- 60. “Selling starts onday 1. And only the CEO can do this. Work out who will be your buyer. Constantly articulate why a company should buy you. Bring clear messages so it can be presented upwards.” Chris Gilbert, Ubiquisys (acq. Cisco, $300M)
- 61. Do This ! 01/Build a list 02/ Connect 03/ Stay visible
- 62. 01/ The List 01/Partners 02/ Competitors 03/ New Entrants
- 63. Targeting Check their press Checktheir IR calls Ask your contacts
- 65. 02/ Connect 01/ Events 02/Intros 03/ Media
- 66. Connect with Business Development CorporateDevelopment VCs & CVCs Their customers!
- 67. ‘How to getour attention? Do something cool for one of our customers.’ Todd Neville, Corp Dev Team Manager, IBM
- 68. How much? $1M/engineer Comparables 2x moneyraised 2x previous valuation Discounted cash flow …
- 69. Pricing What would yousell for? How much is the buyer ready to pay?
- 71. Pricing Revenue = Notthat important What happens with their channels?
- 72. Bankers role Bidding (feevs higher price) Bad cop
- 73. 03/ Visibility 三⼈人成⻁虎 sān rénchéng hǔ 3 men make a tiger
- 74. Get on theirradar 01/ Media 02/ Events 03/ Meetings & updates
- 75. Recap: do this 01/Build a list 02/ Connect 03/ Stay visible
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- 77. Today Innovation is accelerating Youcan’t invent everything Startups might kill you
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- 79. 18 YEARS 14 YEARS 15YEARS 7 YEARS ? YEARSYou Startup(s)
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- 85. You’re tech too JohnDeere buys Blue River For $305M
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- 87. Do This ! Studyothers playbooks Build your own Start small (?)
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- 89. Cisco playbook 01/ Listento customers 02/ Match cultures 03/ Pay for value 04/ Plan careers 05/ Expect some failures
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- 93. Corporate CEO says: ‘We’rebuilding a new and huge division around startupA. The CEO of startupA will be its leader.’
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- 95. Expect failures Portfolio play Industryavg: 2/3? Cisco: 1/3
- 96. Do This ! Studyothers playbooks Build your own Start small Start now
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- 98. Cycle of Life Re-circulatetalent Re-circulate capital Gain experience Grow ecosystem
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