Early Exits: Exit Strategies for Entrepreneurs and Angel Investors (But Maybe Not Venture Capitalists) by Basil Peters

Author:Basil Peters [Peters, Basil]
Language: eng
Format: azw3
Tags: Finance, Business, Entrepreneurs, Exit Strategies, Angel Investors, Investments
ISBN: 9780981185521
Publisher: MeteorBytes Data Management Corp.
Published: 2009-03-01T05:00:00+00:00

That exchange rate change had a devastating effect on the profitability of that business. I wasn’t privy to the financial performance of the business post-transaction, but I knew the company well enough to be able to run the numbers in my head. The change in the value of the business had probably been halved in just a couple of months. This was nobody’s fault and it was entirely unforeseeable. Nobody knew the currency was going to shift like that.

In this situation, the purchaser had actually been much smarter than the previous shareholders and had built a considerable hedge into the business post-transaction. Nevertheless, the change in the value of the business from the seller’s perspective was sobering. The previous shareholders had dodged a bullet. In many other situations where I’ve been a shareholder, luck moved against us instead of in our favor as it did in this case.

The important moral to this story is that ‘stuff happens.’ If the sellers are happy with a selling price the best strategy is to push as hard as you can to get the transaction closed and the cash in the bank. You never know what kind of stuff is about to happen.

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