EP #52 - Selling 2 Companies And Doing An IPO


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Jan 01 2020 49 mins   3

Timestamps

1:33 - What mistakes do Swiss startups make repeatedly when it comes to their exit?
13:44 - Keeping investors satisfied
22:50 - What founders get from an exit
30:57 - When should you sell your company?
33:28 - Requirements for trade sale exit


The Episode In 60 Seconds

Finding the right exit strategy for you and your company.

Getting the basics right

  • Look beyond Switzerland for potential buyers
  • If you can, get help from specialized M&A boutiques
  • Broaden your shareholder base to get easy access to new markets and industries

Selecting the right partner and deal

  • Institutional investors usually curtail the entrepreneurial freedom of the founder more strongly than non-institutional investors such as family offices.
  • Aggressive growth often leads to the founders being left with very small stakes in the company once the time for an exit has arrived.
  • Don’t select buyers based on valuation but based on their values aligning with yours. Don’t forget that most likely, you will still be obliged to work in your company for a few years after it has been acquired.
  • The price of an acquisition is often split in a fixed part and a variable part, called earn-out, that gets paid out on defined targets and incentives over the duration of 1-5 years.

Timing
Depends on several factors:

  • Can the company still realize significantly more growth in the future?
  • Do you still have the passion and energy to drive the business forward?

Exit options

  • M&A (Merger and Acquisition): Selling of the companies assets or shares. For smaller companies with revenue generally above $ 10m.
  • IPO (Initial Public Offering): Listing of the company on a public stock exchange. Usually not feasible for revenue below $ 200m.
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