Exit opportunities for entrepreneurs and angel investors have changed dramatically in just the past few years. Companies are getting sold early than ever before. Tech companies are often sold only one or two years from start up.
Very few entrepreneurs, and angel investors, have sold more than a few companies. There is very little good information available about selling companies.
Almost all of the earlier books on exit strategies were for business owners who wanted to retire. Recently, there have been a number of books written about exit transactions for traditional venture capitalists. “Early Exits” is the first book about selling companies specifically written for entrepreneurs and angel investors.
Everything is changing – the venture capital industry is shrinking at an alarming rate – but angel investing is booming. Today, it’s most likely a company will be sold without ever having an investment from a venture capitalist.
Most people are surprised to learn that the median price of private companies that are sold is only about $15 million. The median price in most of the large databases is closer to $25 million, but that only includes the larger transactions where prices is disclosed.
Today, growth by acquisition is the best way for big companies to grow. Many large companies are spending more on M&A than R&D. Big companies know they are not good at starting businesses or growing businesses from zero to $20 or 30 million in value. Large companies are much better at growing businesses from $ 20 million to $200 million in value. This has created an environment where companies are being sold earlier than ever before.
These trends have created a golden era for entrepreneurs. Never before has it been so easy for entrepreneurs to build valuable companies on so little capital, and to sell them so quickly for so much money.
“Early Exits” is about exit strategies that every entrepreneur and angel investor should be utilizing right from start up to maximize the chances of an early, profitable sale of their companies. Every company needs a clear exit strategy – right from founding. It doesn’t have to be complicated. Good exit strategies are often only a few sentences long. The important thing is to have all of the shareholders aligned on the exit strategy.
The goal of this book is to help entrepreneurs and angel investors have more successful, more frequent and more profitable exits.
