285B Week 9 Lecture 1 TD

285B Week 9 Lecture 1 TD - Click to edit Master subtitle...

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Unformatted text preview: Click to edit Master subtitle style ENG 185B/285B New Venture Creation: Entrepreneurship Growth and Exit Strategies ENGR185B/285B – Leadership ENGR185B/285B – Leadership 22 Today’s Roadmap • Assignment 12 Due – Graduate students • The Exit • Negotiations ENGR185B/285B – Leadership ENGR185B/285B – Leadership 33 The (No) Exit “Hell is other people” WRONG “Hell is not being able to return intrinsic value to stakeholders” What was Sartre’s definition of Hell? ENGR185B/285B – Leadership ENGR185B/285B – Leadership 44 The Exit • Much like valuations….do not worry about it • When asked: – JG: “We are structuring the company as if an IPO were our exit, as we think such a structure is a sound approach for any eventual exit. However, we are flexible regarding the exact nature of the exit. It will come down to timing & maximizing shareholders’ return” – “We are building a sustainable company that succeed either as a stand-alone entity or as an integral component of a larger organization” – “We are not focused on our exit: we will pick the time, place and price” – “The exit is simply another milestone of a long journey; our focus is to reach each milestone and to create shareholder value along ENGR185B/285B – Leadership ENGR185B/285B – Leadership 55 The Exit – Possible Outcomes 66 Types of Buyers • Strategic Buyer • Financial Buyer • Roll-up Buyer - Strategic focus with financial sponsor Most early stage, entrepreneurial, technology-based companies are sold to a strategic buyer. 77 Valuation • Intellectual Property Portfolio • Competitive Landscape • Emerging Technologies • Time To Commercialization • Regulatory Hurdles • Synergy with Acquirer Technology/Business • Cost Savings from Combination • Comparable Transactions • Management Team 88 Structure • Sale of Stock, Merger- Sale of Assets- Taxes- Risk allocation • Earn-Out ENGR185B/285B – Leadership ENGR185B/285B – Leadership 99 The Exit – From a VC’s Perspective ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1010 The Exit- VC Stages of Control ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1111 The Exit ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1212 The Exit – Controlling the Board Click to edit Master subtitle style Click to edit Master subtitle style 5/10/10 ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1515 The Exit – Contractual Exit Rights ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1616 The Exit – Other Contractual Rights ENGR185B/285B – Leadership ENGR185B/285B – Leadership 1717 The Exit - Other Contractual Rights ENGR185B/285B – Leadership...
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This note was uploaded on 05/02/2010 for the course ENGR 185b taught by Professor Staff during the Fall '08 term at UCSB.

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285B Week 9 Lecture 1 TD - Click to edit Master subtitle...

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