thank you start a business you put your
heart and soul into it then you built
something of real quality so fears then
you get a call from a senior executive
at a large company who wants to buy your
business on the one hand it’s exciting
on the other hand you realize that your
life savings are at stake so your
investors they want to help but in an
emerging hub like Berlin they often
don’t have that much experience in that
moment that anybody can start a business
many people can build one but actually
very few people know how to sell or exit
their business well I’ve been helping
entrepreneurs do these exits for 25
years so I’m here to tell you a little
bit about how to do it really well every
hour of every day start up a soul
somewhere in the world and yet too many
times entrepreneurs do these exits badly
and make mistakes and they can undo
years of effort in just a few months
before deal closes and what’s worse they
can’t learn from their mistakes most
will only ever do one or two exits in
their career I give you an example that
let’s go so Bruno he started a business
worked incredibly hard for ten years and
built the best company in his industry
except people across four markets was so
focused on building his business that he
was completely taken by surprise when do
direct competitors were bought by Google
and IBM you know what it doesn’t matter
he said this is actually a real
opportunity we would be able to hire
their best people
they’re gonna be destabilized actually
it’ll work out a few months later though
he found himself competing a deal after
deal against huge sales teams from both
these companies well now he wasn’t
laughing anymore and his company wasn’t
growing that fast either he decided he
would do his own so he could get the
resources to compete and win again but
the market inched buyers offered 30
percent less than they were willing to
pay just the year before they were
worried about how much it would cost to
compete against these giants and so had
to pay less for his business and in the
few weeks before deal closed by or
imposed worse terms no he had no choice
but to accept he reckons that cost him
another percent on top of the 30 percent
so for exiting Offaly we don’t ended up
at half what he could have gotten twelve
months before I wish that this was an
unusual story but it’s not you know
conventional wisdom is just heads down
focus on building a company an exit will
happen Road right sure it’s also true
that most qualified person always
becomes presidents right I mean you know
great exits and great companies often
overlap but very often they don’t if you
take years to build a business and exit
badly
smart idiot now Bruno also assumed that
it’s just harder to do these exits far
away from Silicon Valley I mean it since
the reason that buyers would be more
interested in and more willing to pay a
higher price for companies that are
closer to home right wrong I mean that
narrative makes sense but I’m here to
tell you it’s largely an excuse there
are only two things that matter one what
can entrepreneurs anywhere do so they
don’t end up like Bruno and second if
they do those things is it possible to
do great exit from any emerging hub like
Berlin the answer is an awful lot
entrepreneurs can it must do so they
don’t end up like that and it has never
been easier to do a great exit from an
emerging hub so how do you exit well so
the first one is the most blindingly
obvious but the biggest mistake know
what the goal is what that means
set clear parameters when you get it
consider an exit so when we get bigger
than X when our growth rate is faster
than X what our market segment is hotter
than X you’re not going to be right all
the time but at least you’ll be looking
second visibility equals value the
further away you are from buyers the
more you have to oversteer to get their
attention so that means going to see
them more often than perhaps you think
you should it also demands spending more
on corporate marketing and yet
incredibly international CEOs they often
spend tooth less than the u.s. peers
exact should be perverse now how you
spend that money is important but
spending more badly it’s better than
third as the leader of the company have
to be a fault leader that me writing
about things that affect your industry
not your product great company by the
way that’s something that Bruno didn’t
even think to do was so heads down
building his own business buyers buy
expertise expert or a quickly gets you
on the radar screens this authoritative
for example CEO of a banking software
company writes about the challenge banks
have becoming truly digital so she and
her company quickly get on buyers radar
screens as being authorities an
authority equals value Machiavellian so
what oversteer create the perception of
authority fourth who know absolutely
should have done conscious is when were
the best buyers he just didn’t even
think to do it US companies that have
maybe only 50 people already often have
a vice president at a business
development whose job it is the
commercial deals and build relationships
with large companies incredibly
international companies five times that
size often don’t have someone in that
role I think the exact reverse should be
the case it’s essential to have somebody
whose job it is those relationships not
just for revenue this year next year but
to set the stage for an exit down the
road think of it as an investment not as
an expense five study the most likely
buyers understand the problems or issues
and be able to explain how you and your
company can address them
so sometimes buyers will buy companies
for long term Fred trends you know next
ten or twenty years but the fast
majority of deals are to solve a problem
or address an issue when Apple had to
catch up in artificial intelligence
they bought Siri and a few other
companies when Amazon needed to straight
content they bought left film and that
turned in Amazon Prime video maybe the
best example that I can share with you
is a tiny company
that was actually based near a wheat
field in southern Sweden called c3 they
did aerial mapping the 3d so they’re
engineers spent months explained to
apples engineers how complicated it was
to be able to calibrate these cameras
hanging down for the bottom of airplanes
as they flew very slowly over cities
mapping every single building and 3d but
how essential it was if you want to map
the role in 3d now a few months later
that full reportedly paid a few hundred
million dollars to buy this business
that had barely revenue and only 20
people it’s essential to be able to
understand there’s problems and be able
to articulate exactly how you and your
company can solve very often that sets
the stage for a good six stress the
positives that you take for granted so
so many people don’t stress the most
obvious assets price precisely because
they’re so obvious but they’re not
necessarily obvious to your best buyers
these include things like if you’ve got
great relationships with local customers
you can sell more – or a great
development team was very stable that an
international company would kill to have
or an international product for example
that a US company would find hard to
build if you take your assets for
granted you’ll never get paid for them
know if you do the fix things really
well now comes seven you know interest
from one buyer from – that’s incredible
we competent is what gets great exits
done but because it takes time to be a
buyer until they pop the question then
you’ve waited too long months before you
think they’re gonna get to that point
intensify your efforts with the next
best two or three buyers bring them
along at the same time and if you’re
able to create real interests
well then you’re well on your way to a
headline-making exit be easy to buy the
further away you are from buyers the
easier you need to be to buy you an
example what can go wrong what needs to
be fixed so your largest customer
because they’re worried who you might
get sold to insist they have a
termination clause in their contract
with you two years later
buyer shows up offers you 100 million
for your business but then sits down to
read the contracts sees the termination
clause and pulls back they’re worried
that your largest customer might go away
the revenue will go away I’ve companies
with literally dozens of these ticking
time bombs now there are many better
ways of dealing with these couple issues
that customers have but if you’re not a
lot the risks then years before you even
cheerful raising money so here’s a guy
standing on stage in Berlin telling you
to raise less money when everybody
around you celebrating companies in
larger rounds reality is more money
raised or expensive your company becomes
the harder it is for buyers to buy you
you ever wonder why they’re there buying
these unicorn companies you
private companies worth over a billion
dollars the reason is they have raised a
lot of money become just too expensive
now there are a lot of cases we’re
raising most of our money
scaling as fast as you can is the best
or only way to be able to win at a
market but understand that you were
sacrifice flexibility along the exit and
it was the entrepreneur if you raise all
I think the best for last sell early
okay how am I going to stand here with a
straight face and tell you after years
and years of building a business that
actually you’re going to become great
success by selling your company too
early for every company that got their
market timing perfect we all know dozens
of companies that didn’t waited too long
the value dropped sentiment change
market dynamics changed exiting well it
so if you do all of this is it possible
to do a great exit from an emerging hub
like Berlin
the answer is it has never been easier
over the last 10 years money for
startups in the US has grown four times
money first startups outside the US
forty four times it has never been
easier for kid stumble in have an idea
raise money be able to build a business
and challenge giants Germany and Berlin
have some other specific advantages so
Germany this year for the first time has
more tech developers than anywhere else
in Europe and it produces more
engineering graduates every year that
made aware else in Europe and where
there’s a swath of tech talent
you know money invested money comes and
then exits aren’t far behind and Berlin
has other advantages that actually help
our Silicon Valley 50 years ago low cost
of living especially relative to London
in Paris so the kid can move to Berlin
and start their career and profile and
then start a business and being in the
center of Europe it’s a short haul the
but a point that I could cut and paste
Nairobi or Mumbai for Berlin and make
the same point just to prove it let’s
take the last frontier Africa today
there are more off-grid solar mobile
payments ecommerce companies selling
shares for higher prices in both East
West Africa than ever before just a few
weeks ago we just did the largest ever
African FinTech fundraise completed or
reaches 40 million people across 11
countries over the next 20 years already
headline exits are gonna multiply
Nigeria it becomes truly possible to
envision the headline makes it happening
anywhere on earth bottom line the way we
all think about startups is just wrong
I mean yes heads down build a business
wait for the exit to happen but you’re
also playing roulette with your success
the good news is you follow a few simple
rules work incredibly hard for years and
you set the stage to become an overnight
success anywhere you are on this earth is a good place to start
heart and soul into it then you built
something of real quality so fears then
you get a call from a senior executive
at a large company who wants to buy your
business on the one hand it’s exciting
on the other hand you realize that your
life savings are at stake so your
investors they want to help but in an
emerging hub like Berlin they often
don’t have that much experience in that
moment that anybody can start a business
many people can build one but actually
very few people know how to sell or exit
their business well I’ve been helping
entrepreneurs do these exits for 25
years so I’m here to tell you a little
bit about how to do it really well every
hour of every day start up a soul
somewhere in the world and yet too many
times entrepreneurs do these exits badly
and make mistakes and they can undo
years of effort in just a few months
before deal closes and what’s worse they
can’t learn from their mistakes most
will only ever do one or two exits in
their career I give you an example that
let’s go so Bruno he started a business
worked incredibly hard for ten years and
built the best company in his industry
except people across four markets was so
focused on building his business that he
was completely taken by surprise when do
direct competitors were bought by Google
and IBM you know what it doesn’t matter
he said this is actually a real
opportunity we would be able to hire
their best people
they’re gonna be destabilized actually
it’ll work out a few months later though
he found himself competing a deal after
deal against huge sales teams from both
these companies well now he wasn’t
laughing anymore and his company wasn’t
growing that fast either he decided he
would do his own so he could get the
resources to compete and win again but
the market inched buyers offered 30
percent less than they were willing to
pay just the year before they were
worried about how much it would cost to
compete against these giants and so had
to pay less for his business and in the
few weeks before deal closed by or
imposed worse terms no he had no choice
but to accept he reckons that cost him
another percent on top of the 30 percent
so for exiting Offaly we don’t ended up
at half what he could have gotten twelve
months before I wish that this was an
unusual story but it’s not you know
conventional wisdom is just heads down
focus on building a company an exit will
happen Road right sure it’s also true
that most qualified person always
becomes presidents right I mean you know
great exits and great companies often
overlap but very often they don’t if you
take years to build a business and exit
badly
smart idiot now Bruno also assumed that
it’s just harder to do these exits far
away from Silicon Valley I mean it since
the reason that buyers would be more
interested in and more willing to pay a
higher price for companies that are
closer to home right wrong I mean that
narrative makes sense but I’m here to
tell you it’s largely an excuse there
are only two things that matter one what
can entrepreneurs anywhere do so they
don’t end up like Bruno and second if
they do those things is it possible to
do great exit from any emerging hub like
Berlin the answer is an awful lot
entrepreneurs can it must do so they
don’t end up like that and it has never
been easier to do a great exit from an
emerging hub so how do you exit well so
the first one is the most blindingly
obvious but the biggest mistake know
what the goal is what that means
set clear parameters when you get it
consider an exit so when we get bigger
than X when our growth rate is faster
than X what our market segment is hotter
than X you’re not going to be right all
the time but at least you’ll be looking
second visibility equals value the
further away you are from buyers the
more you have to oversteer to get their
attention so that means going to see
them more often than perhaps you think
you should it also demands spending more
on corporate marketing and yet
incredibly international CEOs they often
spend tooth less than the u.s. peers
exact should be perverse now how you
spend that money is important but
spending more badly it’s better than
third as the leader of the company have
to be a fault leader that me writing
about things that affect your industry
not your product great company by the
way that’s something that Bruno didn’t
even think to do was so heads down
building his own business buyers buy
expertise expert or a quickly gets you
on the radar screens this authoritative
for example CEO of a banking software
company writes about the challenge banks
have becoming truly digital so she and
her company quickly get on buyers radar
screens as being authorities an
authority equals value Machiavellian so
what oversteer create the perception of
authority fourth who know absolutely
should have done conscious is when were
the best buyers he just didn’t even
think to do it US companies that have
maybe only 50 people already often have
a vice president at a business
development whose job it is the
commercial deals and build relationships
with large companies incredibly
international companies five times that
size often don’t have someone in that
role I think the exact reverse should be
the case it’s essential to have somebody
whose job it is those relationships not
just for revenue this year next year but
to set the stage for an exit down the
road think of it as an investment not as
an expense five study the most likely
buyers understand the problems or issues
and be able to explain how you and your
company can address them
so sometimes buyers will buy companies
for long term Fred trends you know next
ten or twenty years but the fast
majority of deals are to solve a problem
or address an issue when Apple had to
catch up in artificial intelligence
they bought Siri and a few other
companies when Amazon needed to straight
content they bought left film and that
turned in Amazon Prime video maybe the
best example that I can share with you
is a tiny company
that was actually based near a wheat
field in southern Sweden called c3 they
did aerial mapping the 3d so they’re
engineers spent months explained to
apples engineers how complicated it was
to be able to calibrate these cameras
hanging down for the bottom of airplanes
as they flew very slowly over cities
mapping every single building and 3d but
how essential it was if you want to map
the role in 3d now a few months later
that full reportedly paid a few hundred
million dollars to buy this business
that had barely revenue and only 20
people it’s essential to be able to
understand there’s problems and be able
to articulate exactly how you and your
company can solve very often that sets
the stage for a good six stress the
positives that you take for granted so
so many people don’t stress the most
obvious assets price precisely because
they’re so obvious but they’re not
necessarily obvious to your best buyers
these include things like if you’ve got
great relationships with local customers
you can sell more – or a great
development team was very stable that an
international company would kill to have
or an international product for example
that a US company would find hard to
build if you take your assets for
granted you’ll never get paid for them
know if you do the fix things really
well now comes seven you know interest
from one buyer from – that’s incredible
we competent is what gets great exits
done but because it takes time to be a
buyer until they pop the question then
you’ve waited too long months before you
think they’re gonna get to that point
intensify your efforts with the next
best two or three buyers bring them
along at the same time and if you’re
able to create real interests
well then you’re well on your way to a
headline-making exit be easy to buy the
further away you are from buyers the
easier you need to be to buy you an
example what can go wrong what needs to
be fixed so your largest customer
because they’re worried who you might
get sold to insist they have a
termination clause in their contract
with you two years later
buyer shows up offers you 100 million
for your business but then sits down to
read the contracts sees the termination
clause and pulls back they’re worried
that your largest customer might go away
the revenue will go away I’ve companies
with literally dozens of these ticking
time bombs now there are many better
ways of dealing with these couple issues
that customers have but if you’re not a
lot the risks then years before you even
cheerful raising money so here’s a guy
standing on stage in Berlin telling you
to raise less money when everybody
around you celebrating companies in
larger rounds reality is more money
raised or expensive your company becomes
the harder it is for buyers to buy you
you ever wonder why they’re there buying
these unicorn companies you
private companies worth over a billion
dollars the reason is they have raised a
lot of money become just too expensive
now there are a lot of cases we’re
raising most of our money
scaling as fast as you can is the best
or only way to be able to win at a
market but understand that you were
sacrifice flexibility along the exit and
it was the entrepreneur if you raise all
I think the best for last sell early
okay how am I going to stand here with a
straight face and tell you after years
and years of building a business that
actually you’re going to become great
success by selling your company too
early for every company that got their
market timing perfect we all know dozens
of companies that didn’t waited too long
the value dropped sentiment change
market dynamics changed exiting well it
so if you do all of this is it possible
to do a great exit from an emerging hub
like Berlin
the answer is it has never been easier
over the last 10 years money for
startups in the US has grown four times
money first startups outside the US
forty four times it has never been
easier for kid stumble in have an idea
raise money be able to build a business
and challenge giants Germany and Berlin
have some other specific advantages so
Germany this year for the first time has
more tech developers than anywhere else
in Europe and it produces more
engineering graduates every year that
made aware else in Europe and where
there’s a swath of tech talent
you know money invested money comes and
then exits aren’t far behind and Berlin
has other advantages that actually help
our Silicon Valley 50 years ago low cost
of living especially relative to London
in Paris so the kid can move to Berlin
and start their career and profile and
then start a business and being in the
center of Europe it’s a short haul the
but a point that I could cut and paste
Nairobi or Mumbai for Berlin and make
the same point just to prove it let’s
take the last frontier Africa today
there are more off-grid solar mobile
payments ecommerce companies selling
shares for higher prices in both East
West Africa than ever before just a few
weeks ago we just did the largest ever
African FinTech fundraise completed or
reaches 40 million people across 11
countries over the next 20 years already
headline exits are gonna multiply
Nigeria it becomes truly possible to
envision the headline makes it happening
anywhere on earth bottom line the way we
all think about startups is just wrong
I mean yes heads down build a business
wait for the exit to happen but you’re
also playing roulette with your success
the good news is you follow a few simple
rules work incredibly hard for years and
you set the stage to become an overnight
success anywhere you are on this earth is a good place to start
Please follow and like us: