For a first-time startup, when the real excitement of early innovation is happening, the daunting business of M&A is usually the last thing on anyone’s mind. But research is showing that the later it starts, the higher the risk
As the market moves away from traditional venture capital for all but the largest startup investments, angels will be expected to exclusively fund startups all the way through to acquisition.
This leaves it to angels and mentors to encourage a sharp focus on exit strategy at the earliest opportunity. The research which reveals these findings is regularly reported on by the author of the acclaimed 2009 strategy guide Early exits by Basil Peters.
Here’s a batch of his latest videos on, which are highly critical of the accepted approach to startup exit strategy and offer some insights into recent developments.
The presentation in the video was given at the ACA (Angel Capital Association) New England Angel Education Series – Boston, MA December 6, 2010.
Here’s Basil Peters’ bio:
Dr. Peters is the principal of Strategic Exits Corp and fund manager for Fundamental Technologies II – an angel fund (seed stage venture fund). He also founded a venture capital firm and a hedge fund, and has been a CEO in Vancouver and Silicon Valley.
Basil writes a blog on best practices for entrepreneurs and angel investors at http://www.AngelBlog.net
Basil is an Entrepreneur in Residence at Simon Fraser University where he helps students and faculty spin-off research into promising technology companies.
He has a Ph.D. from the University of British Columbia in Electrical and Computer Engineering and has received the Entrepreneur of the Year Award, Canada Awards Silver Medal in Entrepreneurship, BC Science and Engineering Gold Medal and Business Leader of the Year Award.
Here’s the ACA’s introduction to the presentation shown in the video:
Exits are the least understood part of investing and entrepreneurship. Exit opportunities have changed dramatically in the past few years; today, it’s more likely that a company will be sold without ever having an investment from a venture capitalist.
Exits are also happening much earlier than before. The largest number of exit transactions today are in the under $30-million valuation range with these exits often completed when companies are only two or three years from startup.
This session looks at the trends for recent exits and the steps the board members and angels can take to set up relationships that will lead to interested potential acquirers. The goal of the session is to help entrepreneurs and angel investors have more successful, more frequent and more profitable exits.