Exits was the focus of the UK Business Angels Association’s recent Winter Investment Forum. Nothing matters more to most startups than refunding at the next milestone; to most angels, how they will succeed in selling on their stake; and to many SMEs how they will fund their growth or sell the business to some larger organisation.
Sir Nigel Rudd, chairman of the Business Growth Fund as well a of UKBAA, and a man with a great deal of experience in selling businesses made six points:
* Identify likely buyers, their reasons, and their prospects as buyers
* Choose one or more advisers who know the market for your business
* Align board and managers alike to sale as well as to ongoing growth
* High-light your weaknesses early
* Don’t be too greedy!
* Expect a last-minute hiccough!
Other speakers emphasised the importance of:
- Alignment between the managers of the business and their angel investors eg over objectives (angels may well expect to get out within three years).
- Yes, focus on growth first
- Consider how it might be possible to structure a sale differently that would make it more attractive
- Recognise that it takes a great deal of time and effort to arrange and complete a sale
- Enjoy the ride!
Among speakers were representatives from the Angel Co-fund and the Business Growth Fund, both of whom seemed to stress how accessible were their funds and how relatively small their investments might be, together with the British Business Bank, and Angel Funds ECI partners, Sussex Place Ventures and Avonmore Developments.
Jenny Tooth, CEO of UKBAA who has steered it along a clear path with enormous energy and drive, outlined the ways in which the organisation is approaching four objectives:
- supporting standards and good practice in Angel investing
- creating mechanisms for enabling Angel Funds to complete investment rounds by deal-sharing
- building the Angel market-place – by blowing the trumpet – in various locations, to new audiences and with other organisations
- research and market intelligence: data, impact of investments and the pulse of the angel market.