Angel Knowledge Series
Best Practices inAchieving Angel Exits Panel: Triggering, Maximizing.
Panelists:
• Gopher Angels, Dave Russick.
• Keiretsu Forum, Larry Chaityn.
• LORE Associates, Steve Harris.
• Maximize Angels, William De Temple.
• MIT Angels, Catherine Calarco.
• RAIN Source Capital, Steven Mercil.
• Moderator: Michael Price, CEO Ventures
Agenda.
1. Preparation Considerations.
- Good discussions to ensure alignment pre-funding with good discussions.
- Inserting terms/provisions upfront to make sure you have a place at the table.
- What are the most important preparation items before initiating acquirer discussions?
- How to trigger discussions when the CEO is not (or is resistant to) initiating them?
- Handling conflict issues of planning an early exit vs maximized value?
- If small, thoughts to keep the costs of advisers from escalating?
- Should angel groups have someone designated as the Exits / CorpDev person to encourage/initiate discussions?
2. Triggering Considerations.
- Pros and cons of using brokers, how to get them engaged/focused, structuring pay experiences & thoughts?
- Whom should be contacted? Just strategics or financial buyers or others, how many, and in what order/timing?
- Most effective ways to contact potential acquirers, thoughts on what should be sent or disclosed in the approach?
- Getting a competitive auction atmosphere going to boost bid prices?
- Should approaches be customized or general for the buyer class: cost/time vs effectiveness thoughts?
3. Negotiating Considerations.
- Best ways to avoid leaving value on the table?
- Thoughts on setting reasonable goals and valuation targets?
- Handling weaknesses: Bring up pre-emptively or response as identified?
- Good/Bad cop approach used often, how to best position your side of the table?
- Philosophies on managing or avoiding brinksmanship on key terms?
- Best ways to keep engagement and harness emotions during the negotiation process?
- What reps and warranties are problematic and which are safer?
- Thoughts on cash vs stock payment issues and reasonable splits?
- Thoughts on leveraging offers to get counter-offers? Pros/cons/timing/disclosure?
4. Due Diligence Considerations.
- What degree of pre-bid diligence is commonly allowed (and IP/reputation protection issues)?
- How much diligence after the term sheet is reasonable or excessive?
- Best ways to manage how long the diligence process will stretch?
- Consideration issues: if stock provided what are the key issues?
5. Post-Acquisition Considerations.
- Management of reps and warranties liabilities?
- When things go wrong (open discussion).
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