Timeline for an Exit

Timeline for an Exit

April 6, 2021 by investor

Most exits come from another company buying the startup. 

It takes six months to a year to complete a buyout.

Delays often come from the startup not being prepared or ready for the M&A process.

Also, setting a valuation and final terms can take substantial time for research and negotiations.

To shorten the time consider the following:

1. Identify and contact the likely buyers and build a relationship before starting the process. 

2. Position the startup leadership as a thought leader with published articles and keynote speeches to provide credibility.

3. Build a dataroom of key documents that will be used in a transaction process.

This is basically a gathering process but does take some time. 

Beware of competitors in the diligence process as they will have access to your detailed financials and other information.

Understand the interest level from the buyer and what other activities may delay their work on your deal.

Set realistic expectations for how fast things will go.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

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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.