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Exit Strategies: Determining the Destiny of Your Organization

Exit Strategies: Determining the Destiny of Your Organization. Mitch Tyson WPI Venture Forum May 14, 2002. Why Do You Need an Exit Strategy When You Start? Investors Want to Know How They Will Get a Return on Their Investment. What Do They Want to Hear?.

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Exit Strategies: Determining the Destiny of Your Organization

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  1. Exit Strategies: Determining the Destiny of Your Organization Mitch Tyson WPI Venture Forum May 14, 2002

  2. Why Do You Need an Exit Strategy When You Start? Investors Want to Know How They Will Get a Return on Their Investment

  3. What Do They Want to Hear? • That You are a Reasonable Person and at the Right Time for the Right Value You’ll Be Ready and Able to Let Go • Your Company Will Be of Significant Value to a Potential Acquirer • There Will Be a Number of Companies Who Could Be Potential Acquirers • Your Company Can Get to a Good Size and Demonstrate Profitability • You Are Targeting a Significant and Growing Potential Market • You Have a Sustainable Competitive Advantage and Protected Technological Position

  4. Create the Exit Strategy Slides • Then Forget About Them • Concentrate on Building a Good Business • This Will Create Good Choices for You

  5. Building a Good Business • Market and Business Strategy • Management Team and Advisors • Financial Planning and Execution • Business Practices

  6. Market and Business Strategy • Develop a Strong Value Proposition • Create a Sustainable Competitive Advantage • Focus Your Product and Market Development Efforts • Prove Your Product and Market • Know Your Competition • Develop Corporate Capabilities in the Order You Need Them • Be Visible in Your Industry • Protect Your Intellectual Property

  7. Management Team and Advisors • Build a Good Board of Directors and Use it • Build a Quality Management Team and Be Prepared to Keep Upgrading it • Provide Ownership Stake to Your Team and Employees • Get a Mentor • Hire Good Lawyers and Use Them • Get to Know Investment Bankers Get Good Advisors and Listen to Them

  8. Financial Planning and Execution • Manage Your Cash • Install Good Financial Systems – Budget and Controls • Keep Good Records • Avoid Entanglements • Get to Profit

  9. Business Practices • Be Humble • Be Honest and Fair • Establish a Vision, Mission, Values, and Culture • Keep Everything Simple • Build a Track Record of Performance Against Plan • Practice Your Story • Be Passionate • Avoid Lawsuits

  10. Building a Good Business is: Good for Being Acquired Good for Going Public

  11. Be Prepared Don’t Panic Verify That it is Serious Involve Your Advisors Right Away Be Cautious, But Not Paranoid Listen, Don’t Be Over Eager Don’t Be Greedy Don’t Be Rushed Do Your Own Due Diligence Don’t Get Distracted From Your Business What to Do if You Get a Call…

  12. From the Acquirer's Side: • Be Straight • Can I Trust This Guy? • Is it a Good Business? • Build a Good Business • Don’t Be Greedy • Does the Seller Have Reasonable Expectations? • Why is He Selling? • You’re Not • You’re a Team Player • Will Integration Be Easy or Hard? • Be Sold • The Acquirer Starts Selling You!

  13. Summary • Pitch the Exit Strategy • Focus on Building a Good Business • Be Prepared to Exit at the Right Time Enjoy the Journey!

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