OPENING DOORS: Startup Coalition co-founder and event moderator Jim DaSilva introduces Successful Exits experts (from left): Andrew Lau of Nanigans, Jay Batson of Acquia and John Nguyen of ScreenEx. Each took a different path to exiting their companies. FOUNDERSWIRE PHOTO
By MIGUEL HERNÁNDEZ MERCADO
BOSTON—Stories abound on both sides of the spectrum: On one hand, there are wildly successful founders who scale their startups into companies that sell for millions of dollars. On the other, there are great ideas that never fully develop because the business side never quite takes off.
The outcome of any startup, however, can be more than just these two options, according to experts at Wednesday night’s panel on successful exits, hosted by the Startup Coalition.
The event, the culmination of a series of monthly discussions, fittingly focused on exit strategies. Panelists Jay Batson, John Nguyen and Andrew Lau, all of whom have founded companies and exited in a different way, shared their insight.
“We have three different panelists with individual experiences, with exits in three different ways,” said Jim DaSilva, the event’s moderator and a co-founder of the Startup Coalition. “One of them sold to a new owner for $800 million, another one took the company to a certain point before handing it over to a new CEO but retaining equity in the business, and the third one was acquired after a couple years of being in business and then went to work for the acquirer.”
“This offers three different scenarios to these entrepreneurs sitting in the audience to realize that not every exit means selling for millions of dollars—you can exit in so many different ways. Maybe you only earn so much financially but you reach a great outcome for your product, which most of these entrepreneurs are very passionate about,” he said.
The panelists spoke to an audience of about 60 people gathered at WeWork South Station, which ranged from startup-curious college students trying to get their first taste of the business world, to members of different small companies taking the opportunity to learn and network, to a handful of local founders and entrepreneurs. The three panelists offered them their personal advice and knowledge gathered from years of experience building and scaling several companies.
Nguyen, a Ph.D. from M.I.T. and founder at ScreenEx, a mobile applications company, recalled the moment when he first took money off the table for his company, as opposed to waiting to sell the whole thing. He recommended it as a way of “escaping the all-or-nothing tension.”
“It really helps to not make it all or nothing anymore. The tension is always, ‘My God, I could always exit now, even if it’s not for what it is worth.’ But if you have the option to take 10 percent equity, even if it’s not at the price you wanted, then you at least get something for the company. You can never get nothing and I think that helps a lot,” he said.
Batson, who besides founding three other companies was the founding CEO of Acquia, an open-source web content management system, talked about learning his limitations and embracing his strengths as an entrepreneur. This led him to relinquish the CEO position once he felt the company needed one “with skills more suited for a later stage.”
“The question becomes not only of the exit of the company but also of the exit of the entrepreneur. From a million to $10 million in revenue is one kind of CEO. You reach $10, $15, or $20 million, and the way you operate as a CEO changes. Not always can that original CEO make the shift. In Acquia, I had a discussion with the investors up front, I want to be let known when I’m not helping the company anymore. I’m more of an early stages kind of a guy, and we went and found another CEO once we reached a threshold, and he did a great job,” he recalled.
Lau, a founder at Nanigans, an advertising-automation software, talked about motivation and pointed out that the final goal does not always have to be wealth creation.
“When we started talking to the media and outlining our company, we found that it was less about finances and more about the product itself. When you’re doing PR or press or any sort of marketing, it’s important to know why you’re doing what you’re doing,” he said.
Startup Coalition is offering a Pitch Review, where members review pitches from local startups, scheduled for July 19. If you are a founder and would like to be considered, APPLY HERE. Monthly discussions will pick up again starting in September.
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