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Two different discussions about exits

Last week, I had two conversations about exits that couldn’t have been any different.

Conversation #1

First, a large company reached out to one of our portfolio companies in an effort to buy the company. The founder called me up and asked me what I thought. I asked him, “what do you want to do?”.

His response: “what would be a good outcome for you as my investor?”

My response: “Forget us, is there a number where you would want to sell the company right now?”

His response: “not really, there is too much opportunity for us”

My response: “that’s your answer”

Conversation #2

I talked to another entrepreneur last week who walked me through a WebEx presentation for his brand new company. At the end of the presentation he then said “here’s the exit strategy. I don’t want to take this company public. I don’t want to run it forever. The exit strategy is obvious. It’s a flip to big company xyz”.

I told him that while I respected his opinion, I don’t think we are going to be compatible. While many/most companies do sell, I prefer if that wasn’t the plan day zero.

Over time things change, founders & investors may gain more confidence or less confidence. I just don’t want to plan for a quick flip on day zero.