When Is an Early Exit the Right Choice for Companies?

For early and expansion stage organizations, there are times when an early exit might be a good idea. Dr. Basil Peters, an expert in the early exit, has seen many instances where scaling a business and exiting quickly paid off. But as Peters says, an early exit is a viable option in many instances — but not all. The choice comes down to immediate profit versus lost potential revenue. Predicting future revenue is never a concrete process, but an unbiased analysis should be able to provide some insights, he says. Another factor to consider is the amount of time before the exit.…

Top Signs a Company is NOT Ready to Go Public

An impending IPO may be on the horizon, but is your company ready for the plunge? A company doesn’t have to be perfect (what company is?)  in order to go public, but there are warning signs that can pollute a potential IPO. Every internal process should be scrutinized before making the move, says Tom Johansmeyer of InsideIPO.com. He says that it’s important for a company’s internal operations to be streamlined and free of inefficient or even questionable practices. The key to remember is that, when hitting the public market, you’re not just selling the company internally; there will be many outside eyes…

Can Social Media Help Propel an IPO?

Where does social media fit into an IPO foray? It has more of a place than you may initially think, explains Tom Johansmeyer of InsideIPO.com. Peeling back the many layers of social media, you can uncover a lot of valuable information that can be funneled back into a company (and toward an IPO), he says in this short video. This can come in the form of advice, criticisms, or some other type of valuable insight. Content is one way to expedite the process of extracting information from social media, says Johansmeyer. By proactively putting out tailored content, you can more easily acquire specific information that’s directly…

Is There a Backlog in the IPO Market?

During the recession, IPOs were a rarity. Now, with a resuscitated economy to propel them, IPOs are flooding the once-quiet market. Although not all of the companies that are anticipated to go public will be greeted with jubilation (read: GroupOn), many of the hopefuls-in-waiting are poised to surge onto the scene. Still, as Tom Johansmeyer of InsideIPO.com explains, there’s a heavy backlog being created. As of mid-October, there are many companies patiently waiting for their filings to be cleared. For more on the backlog currently being experienced with the IPO market, watch full video featuring Johansmeyer.

Why Startup Founders Don’t Always Get Their Full Share at Exit

Let’s say you’re a startup founder preparing to sell your company. After a few rounds of venture capital financing, your ownership has been diluted to about 20 percent and, at exit, you’re expecting to receive that share from the final sale price.

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Problem is, that’s no guarantee. The reason, venture capitalist Fred Wilson explains on his blog AVC, is that when a company is sold at price points around or below the number its been financed at, its preferred stock holders will get to choose between getting their cost back or taking…

Tips for Prepping Your Startup’s Patent Portfolio

Avoiding unnecessary obstacles during the sale of a startup should be a primary focus for all involved parties.

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With respect to patents, preparing your intellectual property for sales early allows companies to address any weaknesses before reaching out to prospective buyers, writes attorneys Rebecca M. McNeill and Mayssam H. Ali in a recent post for Venture Beat. The two advise companies to first aggregate all of the intellectual property they possess, and evaluate their strengths and weaknesses. The goal should then be to improve the coverage of your entire portfolio. Future investors will look favorably upon…

SaaS: Good News for Valuations!

How is demand for Software as a Service and cloud computing impacting public software company valuations?

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According to a quarterly report released by San Diego-based Software Equity Group, the impact is extremely positive. Valuations are continually growing, dating back at least two quarters. During the latest quarter, nearly 400 merger and acquisitions occurred, accounting for $21.3 billion in transactions. The quarter prior to this saw 423 mergers and acquisitions, but the transactions didn’t amount to the same dollar total as the latest quarter (the figure, however, is inflated by an $8.5 billion deal brokered…