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Module 108: Exit Strategies – Module Description

Description

This module will focus on the most important step in angel investing, achieving a timely and profitable exit. Learn from the experience of others how to ensure that you capture and crystalize the gains of your investments.

Overview The exit is the essential point in any investment lifecycle where the angel finally gets their financial return. So it must be achieved – ideally very quickly and with a very large return. This module will cover a wide range of tips and techniques, hard-won from the experience of angels who have gone before, to ensure a successful exit from angel investments. A systematic approach will be presented in which the exit strategy becomes the key driver of all investment decision-making, including the screening and selection of investment opportunities, the structuring of term sheets, and the growth strategies for the new ventures.

Learning objectives By the end of this module the student will be able to:

• Explain the pros/cons of various exit options

• Describe how exit strategy affects the choice of investment and the structuring of term sheets

• Design a term sheet to maximize the likelihood of a successful investment exit

• Describe how to influence the strategy of a new venture to prioritize achieving an exit.

Prerequisites Students should have completed modules 106 and 107 or have equivalent direct experience as an angel investor.

Pedagogy A mix of panel discussions, case studies, and instructor-led group discussions will predominate the methods used in this module.

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Detailed topics This module will cover:

• Thelifecyclestagesofinvestortypes• Startupeconomics,whentosyndicatewithotherangels• Angelsvs.VCs,whentoco-invest• Exitpaths,M&A,IPOandbuyback• Exitstrategyasascreeningcriterion• Exitstrategyandthetermsheet,vesting• Idealexittiming• Techniquestomaximizeexitvalue• Theexitprocess,roles&responsibilities• Commonpitfallsandmistakes• Insightintotheroadmapsofpotentialacquirers• Uniqueaspectsofcross-borderexittransactions

Assignments Online self-assessment exercises will confirm the ability of independent studies students to (1) choose an effective exit path for a specific investment, (2), understand how the choice of co-investors affects exit strategy, (3) evaluate the exit-strategy aspects of a term sheet, and (4) create an exit plan for a specific investment.

Schedule Four one-hour blocks, corresponding to the assignments above. Offered regionally once each year as a single session.

Student prep work None required