How Investors can find an exit in a Startup Investment.
One of the challenges for investors funding startups is finding the exit.
Startups typically exit through an IPO or an acquisition by a larger company.
As a startup investor you have little to no control over the exit and can end up in a deal for ten years or more.
So how can an investor find an exit?
The solution is to define the exit before investing.
Setup conditions to give you the option of exiting at a prescribed time or stage of company.
You can insert redemption rights and clauses into the terms sheet giving a predefined exit and return.
If the startup is not defining the exit, then you should.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.