Executing Exits

Executing Exits - feedback and thanks

Bill Payne’s Executing Exits workshop last Wednesday was a big success. Over 130 people – members and guests to this workshop – came to our Summit sessions last week. One attendee travelled over 300 miles, and two others travelled over 250 miles, to see Bill and learn the secrets to planning and executing the exit from a business.

These events cannot take place without the support and input of many – Bill, the Angel Resource Institute, our members, and the community partners who helped promote the session.

We want to give an especially big thanks to Wells Fargo for its support and publicity, and to Frank Williamson and Chris Wright at Oaklyn Consulting for helping in particular to fund the costs of the workshop.

And lastly thanks to the panel participants – Mac, David Dunn, and VentureSouth portfolio company CEO Rich West of Baebies – for adding their anecdotes and practical experience to Bill’s information.

Thanks to everyone. Now, let’s get implementing the lessons and turning these companies into real success stories!

And if anyone has any feedback - let us know here.

Executing Exits - "our" exits

We are bringing this Executing Exits workshop to the Carolinas for the first time because exits are so integral to angel investing, and so crucial to all the efforts aiming to develop our early stage community.

We’re also personally interested in the workshop, as "executing exits ourselves" has been an important part of our “prior lives.”

To blow our horns for three paragraphs, Mac has sold five companies himself – including KYCK.com to NBC Sports and Mountain Khakis to Remington. He is an exceptional resource to help companies create a long-term exit strategy – and execute it. Start with his blog here.

Paul began his career at NM Rothschild & Sons in London – one of the oldest, active, and most prestigious M&A advisory firms in Europe. He helped advise on sales of companies sold for in total almost $10 billion – including the largest sale of a chain of hospitals in the UK.

And under Matt’s stewardship VentureSouth’s investors have already seen 9 investment rounds fully exited (and 11 more partially exited). You can see a list of these exits on our portfolio page.

VentureSouth’s exits have included some stellar returns – including several returns above our target 50% IRR.* In aggregate they have generated a 1.4x return, and quickly enough to create an IRR overall of 60%. These have ranged from one at 6% IRR (not amazing, though still beating those indices) to one at 2817% IRR (amazing). Please refer more of those to us!

But even with this long expertise and positive track record, we have plenty more learning to do. We have several companies that are not as close to reaching an exit as they could have been by now. How can investors encourage / cajole / help / compel their portfolio companies to drive to an exit? Perhaps this workshop is the first step.

*IRR = Internal Rate of Return = an annual rate of return. 50% IRR compares to around 7% annual return from owning public equities.

Executing Exits - the key ingredients to successful company sales

Angel investors rely on “exits” – essentially someone buying the company in which they have invested (in a liquidation event) – to make money.

This can be a surprise for people investing in public markets, where exits are as easy as hitting “sell.” They are critical to angel investing, and they require four key ingredients:

1) An ecosystem supportive of exits. Matt has written about this before in the Upstate Business Journal – and that flywheel is beginning to gain some momentum.

2) Aligned investors and entrepreneurs. Investors must make "exit strategy” feature prominently in due diligence - and you should only invest in entrepreneurs whose exit goals match your investment horizon. We talk about this with our investors every time we evaluate a new investment opportunity.

3) A clear plan for an exit. Exits rarely, if ever, “just happen.” As Mac discussed in his UBJ article this week, and in an earlier interview with John Warrillow of “Built to Sell” fame, exits need to be strategized, planned, and rigorously pursued – another “process” that should be integral to your business from the first months, not a rushed afterthought.

4) An understanding of executing exits. Most people don’t get to see multiple exit processes, and rarely have the support to execute their first successfully. This is why we are bringing the ARI's “Executing Exits” workshop to Greenville on 11/30. You should sign up here.