Next week, we begin again with new insights from startup through liquidity event, including guest postings by some of the nation’s best known angel investors and entrepreneurs. The liquidity event and beyond This is the final posting in this cycle. MORE
The belief then was that most founders couldn’t acquire the HR, finance, sales, and board governance skills rapidly enough to steer the company to a liquidity event, so they hired professional managers. If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea. Antoine de Saint-Exupéry. I was visiting with an ex-student who’s now the CFO of a large public tech company. MORE
The technical term for this is the “liquidation waterfall”, because on a liquidation event (whether good, as in a large buyout, or bad, as in a distress sale, investors (and others) get paid out in a specified order. MORE
If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? The liquidity event and beyondHave you figured out what you want to have, or to be, when you reach the end of your personal run in this business life? MORE
Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Further, preferred stock holders can be recipient of accrued dividends in a sale or liquidation. The liquidity event and beyond MORE
Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. MORE
Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public. MORE
Some companies have good, formal stock option plans with properly priced options set to reward all in the event of a corporate sale. The liquidity event and beyondUsually, the higher the ranks, the more the options held and therefore the greater reward at exit. If there has never been outside investors to organize such an option program, many CEOs never get around to creating a system for rewarding employees in a sale. . MORE
And once a month, while watching TV, I spend part of an evening writing personal messages to each birthday employee, recalling an event or complimenting a behavior or success. Even today, years later, I am met at industry events by former employees with a common refrain, “Our company was the best employer I have ever had, before or since.”. That is a legacy you cannot buy, at a cost of acknowledging individuals with respect and personal recognition. MORE
There are also integrated service providers and a collaborative environment of founders working toward the common goal of a liquidity event. Ever wondered what expanding your startup internationally entails? We shed some light, and hopefully—provided some encouragement, during our recent webinar with David Glazer, Partner at Fried Frank, JD Breidenstein, Minister Counselor for Commercial Affairs and Ben Parkinson, Visa Analyst, both with the U.S. MORE
The liquidity event and beyondIsn’t the goal of any negotiation to get the maximum possible out of the other side? I have learned from long experience that the last bit of concession is the most expensive in a negotiation. MORE
The inciting incident in a movie is the event at the beginning of the story that causes the hero’s life to be completely transformed and irrevocably changed, and makes the whole story unfold. I thought of this in a recent liquidity event in one of my portfolio companies. MORE
I propose that there are few times in life when the opportunity opens to look only outward, to participate in charity events, extended family vacations, community boards and even coaching other entrepreneurs. The liquidity event and beyondYou’ve surely heard of Maslow’s Hierarchy of Needs, in which Abraham Maslow laid out a human’s needs from the physiological first, to safety, then love and belonging, on to esteem and finally self-actualization. MORE
But most of us dream of selling the business someday for lots of money and building our wealth upon that event. The liquidity event and beyond MORE
Next, have the group focus upon column three, ignoring the obvious gain our company would make in liquidity to shareholders. Email readers continue here.] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers. MORE
The liquidity event and beyond Maybe you have not heard the term, “deal book.” That’s a comprehensive piece on a company for use by a buyer in determining fit. MORE
The liquidity event and beyondDave’s note: For the second time, we invite Basil Peters, author of “Early Exits,” back as our guest – to provide more of his insight into the “when” to exit by selling your business. MORE
The liquidity event and beyondWe come to the end of this cycle of insights with a thought about how you might view your successful exit from the company you have spent so much effort to build. MORE
The liquidity event and beyond Not all companies are successful. The end game can be a failure of the business. In fact, many angel investors or venture capitalists look for and respect the lessons learned by entrepreneurs that have survived a failed business. MORE
But the closing was such a non-event that you wonder why people even call it a “closing.”. The liquidity event and beyond Now you have worked for months to get this deal to the closing, anticipating the wire transfers to the shareholders that will come any minute. MORE
Liquidity. While you might be interested in building a company that changes the world, regardless of how long it takes, your investors are interested in funding a company that changes the world so they can have a liquidity event within the life of their fund ~7-10 years. (A MORE
The liquidity event and beyond Each decision you make to commit resources affects the future value of the business to some degree. Minor decisions, such as replacing employees who have left the company or equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this analysis. MORE
The liquidity event and beyond This is one of my favorite insights, since I lived this one in a positive exit from my computer business. Most people will tell you that there are two kinds of eventual buyers for your business: financial and strategic. MORE
The liquidity event and beyond Many CEOs have asked me if I felt an investment banker adds value if the buyer has already been identified. MORE
Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership. MORE
And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money. The liquidity event and beyond MORE
Pilot-authors tell their stories in the first person, and all of us readers slow down to think while reading of these events, wondering “what if” or whether this could happen to me. General The liquidity event and beyond MORE
Paying commissions to undisclosed third parties in order to obtain deals, hiding or entering misleading financial data, associating with anyone with a past SEC suspension, and many more “gotcha” events, qualify as strong deterrents to a good closing. The liquidity event and beyond MORE
Raising money The liquidity event and beyond There are several times when stakeholder loyalty is tested to the limit. For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck. MORE
Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). In the 21 st century it’s harder for large corporations to create disruptive breakthroughs. MORE
Protecting the business The liquidity event and beyondWhen do you sell your company? Obviously we all want to sell at the top. And there is the problem. How do you know when you are at or near that right point to sell for maximum value? MORE
The liquidity event and beyondDave’s note: We are privileged this week to host a post by Arthur Lipper, a well-respected member of the international financial community since 1954. MORE
For high growth ventures being groomed for a lucrative liquidity event, this is usually a wise choice, presuming additional growth capital can be successfully raised on agreeable terms. The liquidity event and beyond MORE
If your company is not a “life style&# enterprise and you aim to sell it someday for liquidity, or even aim toward an IPO, then you should have some form of stock ownership or shadow ownership plan for your employees. I know from my own experience that no matter how good you think you are at company-building, it is those who surround you with talent that make the difference and add extraordinary value to create an eventual liquidity event. MORE
If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback. MORE
The liquidity event and beyondDave’s note: John Huston is founder and past manager of the 300+ member Ohio TechAngel Funds and a past Chairman of both the Angel Capital Association and the Angel Resource Institute. . By John Huston. MORE
The liquidity event and beyond When we are young and early in our business lives, we feel infallible to the degree that we do not think of what might happen if we die while in office or decide to leave the company for any reason. MORE
His Strategic Exits Corporation provides M&A advisory services, and he is much in demand as a speaker at angel and entrepreneur events worldwide. – Dave. The liquidity event and beyond MORE
The liquidity event and beyond I’ve been involved with well over a dozen successful exits and four initial public offerings over the years, some of them with monstrous gains, some more modest. Then in addition, there are the exits that returned some portion of capital, but nothing more. MORE
Sometimes the end game or sale of the company is not a happy event. Is there a liquidation preference in place where the preferred investors can take a multiple of their investment, (twice or three times the amount) from a sale before the common shares receive anything? MORE
Positioning The liquidity event and beyondYou may be an architect or doctor or other professional managing your business, knowing that the end game value of your client or patient list is small and not easily transferred to any buyer without attrition. MORE
Too often, entrepreneurs neglect planning for and managing personal finances as they focus on building their business, lining up financing, and steering toward an eventual liquidity event. One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets. MORE
But they occur often enough to watch for and take advantage of if ready to make the run for a liquidity event. The liquidity event and beyond MORE
Liquidity Event Related Topics Steve Blank
MARCH 16, 2016
Liquidity. While you might be interested in building a company that changes the world, regardless of how long it takes, your investors are interested in funding a company that changes the world so they can have a liquidity event within the life of their fund ~7-10 years. (A
Berkonomics
FEBRUARY 23, 2017
If you own a significant piece of the business, is this a time to consider planning an eventual exit or liquidity event? The liquidity event and beyondHave you figured out what you want to have, or to be, when you reach the end of your personal run in this business life?
Berkonomics
FEBRUARY 9, 2017
Protecting the business The liquidity event and beyondWhen do you sell your company? Obviously we all want to sell at the top. And there is the problem. How do you know when you are at or near that right point to sell for maximum value?
Berkonomics
SEPTEMBER 24, 2015
For high growth ventures being groomed for a lucrative liquidity event, this is usually a wise choice, presuming additional growth capital can be successfully raised on agreeable terms. The liquidity event and beyond
Berkonomics
SEPTEMBER 17, 2015
Pilot-authors tell their stories in the first person, and all of us readers slow down to think while reading of these events, wondering “what if” or whether this could happen to me. General The liquidity event and beyond
Berkonomics
OCTOBER 8, 2015
The liquidity event and beyondWe come to the end of this cycle of insights with a thought about how you might view your successful exit from the company you have spent so much effort to build.
Berkonomics
SEPTEMBER 10, 2015
The liquidity event and beyondDave’s note: For the second time, we invite Basil Peters, author of “Early Exits,” back as our guest – to provide more of his insight into the “when” to exit by selling your business.
Berkonomics
OCTOBER 1, 2015
Sometimes the end game or sale of the company is not a happy event for the early investors, including the entrepreneur or the founders. Further, preferred stock holders can be recipient of accrued dividends in a sale or liquidation. The liquidity event and beyond
Berkonomics
AUGUST 27, 2015
The liquidity event and beyondDave’s note: We are privileged this week to host a post by Arthur Lipper, a well-respected member of the international financial community since 1954.
Berkonomics
SEPTEMBER 12, 2013
But most of us dream of selling the business someday for lots of money and building our wealth upon that event. The liquidity event and beyond
Berkonomics
OCTOBER 24, 2013
Next week, we begin again with new insights from startup through liquidity event, including guest postings by some of the nation’s best known angel investors and entrepreneurs. The liquidity event and beyond This is the final posting in this cycle.
Berkonomics
SEPTEMBER 5, 2013
The liquidity event and beyond When we are young and early in our business lives, we feel infallible to the degree that we do not think of what might happen if we die while in office or decide to leave the company for any reason.
Berkonomics
OCTOBER 3, 2013
The liquidity event and beyond Maybe you have not heard the term, “deal book.” That’s a comprehensive piece on a company for use by a buyer in determining fit.
Berkonomics
SEPTEMBER 19, 2013
The liquidity event and beyond Not all companies are successful. The end game can be a failure of the business. In fact, many angel investors or venture capitalists look for and respect the lessons learned by entrepreneurs that have survived a failed business.
Berkonomics
OCTOBER 17, 2013
But the closing was such a non-event that you wonder why people even call it a “closing.”. The liquidity event and beyond Now you have worked for months to get this deal to the closing, anticipating the wire transfers to the shareholders that will come any minute.
Berkonomics
SEPTEMBER 26, 2013
Paying commissions to undisclosed third parties in order to obtain deals, hiding or entering misleading financial data, associating with anyone with a past SEC suspension, and many more “gotcha” events, qualify as strong deterrents to a good closing. The liquidity event and beyond
Berkonomics
OCTOBER 10, 2013
The liquidity event and beyond Many CEOs have asked me if I felt an investment banker adds value if the buyer has already been identified.
Berkonomics
NOVEMBER 12, 2011
And yet, as I recall the greatest thrills, the memorable events, the best of memories, almost none are about the money. The liquidity event and beyond
Berkonomics
AUGUST 29, 2013
Sometimes the end game or sale of the company is not a happy event. Is there a liquidation preference in place where the preferred investors can take a multiple of their investment, (twice or three times the amount) from a sale before the common shares receive anything?
Berkonomics
SEPTEMBER 13, 2011
Next, have the group focus upon column three, ignoring the obvious gain our company would make in liquidity to shareholders. Email readers continue here.] The magic of this exercise is not only in the organization of group focus upon the liquidity event and possible buyers.
Berkonomics
SEPTEMBER 17, 2011
But they occur often enough to watch for and take advantage of if ready to make the run for a liquidity event. The liquidity event and beyond
Berkonomics
OCTOBER 28, 2011
I propose that there are few times in life when the opportunity opens to look only outward, to participate in charity events, extended family vacations, community boards and even coaching other entrepreneurs. The liquidity event and beyondYou’ve surely heard of Maslow’s Hierarchy of Needs, in which Abraham Maslow laid out a human’s needs from the physiological first, to safety, then love and belonging, on to esteem and finally self-actualization.
Berkonomics
AUGUST 27, 2011
The liquidity event and beyond Each decision you make to commit resources affects the future value of the business to some degree. Minor decisions, such as replacing employees who have left the company or equipment needing updating, are usually considered operational in nature, and unless the business is changing direction, not relevant to this analysis.
Berkonomics
JUNE 17, 2011
Positioning The liquidity event and beyondYou may be an architect or doctor or other professional managing your business, knowing that the end game value of your client or patient list is small and not easily transferred to any buyer without attrition.
Berkonomics
NOVEMBER 4, 2011
The liquidity event and beyondIsn’t the goal of any negotiation to get the maximum possible out of the other side? I have learned from long experience that the last bit of concession is the most expensive in a negotiation.
Berkonomics
OCTOBER 21, 2011
Some companies have good, formal stock option plans with properly priced options set to reward all in the event of a corporate sale. The liquidity event and beyondUsually, the higher the ranks, the more the options held and therefore the greater reward at exit. If there has never been outside investors to organize such an option program, many CEOs never get around to creating a system for rewarding employees in a sale. .
Berkonomics
SEPTEMBER 2, 2011
The liquidity event and beyond This is one of my favorite insights, since I lived this one in a positive exit from my computer business. Most people will tell you that there are two kinds of eventual buyers for your business: financial and strategic.
Berkonomics
OCTOBER 13, 2011
And once a month, while watching TV, I spend part of an evening writing personal messages to each birthday employee, recalling an event or complimenting a behavior or success. Even today, years later, I am met at industry events by former employees with a common refrain, “Our company was the best employer I have ever had, before or since.”. That is a legacy you cannot buy, at a cost of acknowledging individuals with respect and personal recognition.
Berkonomics
OCTOBER 7, 2011
Raising money The liquidity event and beyond There are several times when stakeholder loyalty is tested to the limit. For employees, a late or missed payroll is the ultimate test of corporate loyalty, divorced even from an employee’s ability to make do without a paycheck.
Berkonomics
SEPTEMBER 23, 2011
The liquidity event and beyond I’ve been involved with well over a dozen successful exits and four initial public offerings over the years, some of them with monstrous gains, some more modest. Then in addition, there are the exits that returned some portion of capital, but nothing more.
Berkonomics
JUNE 2, 2010
If your company is not a “life style&# enterprise and you aim to sell it someday for liquidity, or even aim toward an IPO, then you should have some form of stock ownership or shadow ownership plan for your employees. I know from my own experience that no matter how good you think you are at company-building, it is those who surround you with talent that make the difference and add extraordinary value to create an eventual liquidity event.
Startup Professionals Musings
SEPTEMBER 16, 2017
Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public.
Early Growth Financial Services
JULY 23, 2014
There are also integrated service providers and a collaborative environment of founders working toward the common goal of a liquidity event. Ever wondered what expanding your startup internationally entails? We shed some light, and hopefully—provided some encouragement, during our recent webinar with David Glazer, Partner at Fried Frank, JD Breidenstein, Minister Counselor for Commercial Affairs and Ben Parkinson, Visa Analyst, both with the U.S.
Gust
JUNE 7, 2014
The technical term for this is the “liquidation waterfall”, because on a liquidation event (whether good, as in a large buyout, or bad, as in a distress sale, investors (and others) get paid out in a specified order.
Steve Blank
JULY 11, 2017
The belief then was that most founders couldn’t acquire the HR, finance, sales, and board governance skills rapidly enough to steer the company to a liquidity event, so they hired professional managers. If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea. Antoine de Saint-Exupéry. I was visiting with an ex-student who’s now the CFO of a large public tech company.
Startup Professionals Musings
FEBRUARY 6, 2015
Once invested, you should expect no return until the first “liquidity” event in 3-5 years, maybe longer. Liquidity events include merger or acquisition (M&A), or Initial Public Offering (IPO) when the stock goes public.
Early Growth Financial Services
JULY 10, 2014
Too often, entrepreneurs neglect planning for and managing personal finances as they focus on building their business, lining up financing, and steering toward an eventual liquidity event. One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets.
Startup Professionals Musings
AUGUST 19, 2017
If you take investor money, expect a push for hockey-stick growth and a liquidity event, like going public (IPO) or sale (M&A), to get the payback.
View from Seed
MAY 19, 2015
Jet-set lifestyles are perhaps appropriate after the liquidity event, but founders and executives must avoid them at all costs before that, as employees treat resources with the same respect (or lack thereof) as their leadership.
Steve Blank
JUNE 23, 2016
Capital is returned to these investors through liquidity events (originally public offerings, but today mostly acquisitions). In the 21 st century it’s harder for large corporations to create disruptive breakthroughs.
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