pwc exit presentation mac leod-may 15 2012
TRANSCRIPT
M & A Breakout
Mark MacLeod @startupcfo
Intro
Real Ventures
Angels & VCs
Consultants
StudentsEntrepreneursExperts & MentorsService Partners
Iterative Capital
Acquisition Opportunities
CommercialProof Points
Discover
Develop
Display
$2.5M
$47.5MAccelerator Program
Seed Stage Fund
‣ Why do VCs invest?
‣ VC Fund Math
‣ $ 50M Fund -> $ 150M returned ‣ 10% - 20% average ownership at exit ‣ $ 750M - $ 1.5B exit proceeds
‣ All about the exit
M & A: VC Perspective
‣ Considerations: ‣ 1st time ‣ What’s “best” for the product / vision? ‣ Stakeholder interests? ‣ Gut ‣ Market / economy ‣ # of years risk taken off the table
M & A: When to Sell
‣ Momentum & pace
‣ Market leadership
‣ Unbelievable tech team
‣ Highly visible
‣ Existing relationships
‣ Potential for disruption
‣ Luck & timing
M & A: Good vs. Great Exits
‣ Small amounts of Capital
‣ Speed matters
‣ In the deal flow
‣ Disruption
‣ Timing
M & A: Profitable Exits
‣ Most exits are modest
‣ Big tech giants struggling to hire and innovate
‣ Key decision point for VCs early on ‣ Do we continue to invest?
‣ Seed execution is more important than ever
M & A: The Acqui-exit
‣ Build relationships ‣ Product Dev ‣ Corp Dev ‣ Biz Dev
‣ Airmiles -> Valley
‣ Work your stakeholders
‣ Non stop hustle
M & A: Getting Buyers
‣ Secondary Sale
‣ Raise more $
‣ Management team
M & A: Alternatives to Exit
‣ Intros (& lots of them…)
‣ Sounding board
‣ Board Committee
‣ Help on diligence
‣ Increase the price
M & A: Role of VCs
Don’t worry about “blocking” rights
‣ Be organized (always)
‣ Have the right advisors
‣ Be wary of agents
‣ Avoid earn-outs
‣ Cap tables are malleable
‣ Make the buyer pay for retention
M & A: Tips & Tricks
M & A: Case Studies
Motivated buyer Timing Relationships
Market leadership
‣ Great time to be an entrepreneur
‣ More and more exits happening in Canada
‣ We need the 2nd generation of founders
‣ Know what success means to you and what type of outcome you want *before* raising VC
M & A: Final thoughts