Basil Peters is a specialist in Early Stage Exits in North America. While looking through his web site www.exits.com, I came across a group of four short (around 6 minutes each) videos on the topic ‘How Exits Have Changed′ that he presented at the National Angel Capital Association Summit in March this year in Austin, Texas.
I believe these are essential viewing for the founders of an innovative technology start up.
Basil’s initial focus is on the changing investor scene in the US with more and different types of investors and acquirers in the picture than before. This creates a new range of possibilities for founders to attract investment or sell (as distinct to licensing) their technology / business.
However investors look for the exit potential before they put their money down. They’re more aware now than ever before that the percentage of successful exits for founders is very low, just a few percent.
This also means the investor music can stop the moment the ‘fever’ level of interest in a particular new technology subsides, usually because investors now see it as a ‘crowded’ space with limited if any chance of profitable exit.
Basil talks about timing issues as being crucial. this as riding and catching the wave.
If your timing is out, you miss out. Without more investment into your start up you will now be competing with a bunch of well funded startups which did get the money and can now pursue their plans more aggressively. And the acquirers will be busy for some time to bed down their newly acquired technology and move onto other things.