This way to the Egress

PT Barnum was one of the ultimate showman the business world has ever seen. Founder of the famous Ringling Brother’s circus, he used to put up a sign during his shows. It was hung on an elaborate door & stated: “This way to the Egress”

Those without a strong vocabulary would think that “Egress” meant an exhibit. They would walk through the door & it would immediately take them outside. And lock them out. Egress is an exit. They had been tricked. Now they’d have to pay again to get back in.

Who knows? You or I might have fallen for it.

In todays entrepreneurial amped society, the word “exit” means a whole lot more than it did for old PT. It has become religion to some and important at the least to others. For entrepreneurs, the capital landscape is quickly changing and with it the path for us to reach our goals. I recently read an interview about these changes. And about exits. I thought that you might like to read it also. Basil Peters is an angel investor. He believes that the traditional venture capital model is broken and that entrepreneurs should focus on their exits from the very beginning days of their start-up. Read the article here. These are his opinions about start-ups & exits that I sided with:

  • The exit is the most important goal for every externally financed company.
  • Traditional VC’s are “financial dinosaurs” and don’t work anymore in technology. The VC model must evolve.
  • No longer do the “best & the brightest” talent want to go to big companies. They have better opportunities with early stage and start-up co’s.
  • Because of the above, big company’s are no longer good at innovation. But they are great at taking a $10-$30 million dollar company and taking it to $100-$300 million. This is where the exit opportunity exists.
  • Capital efficiency today is staggering. Technology can enable a start-up to grow to tens of millions in value from less than $1 million in capital.
  • It’s a myth to think that businesses are “bought” not “sold”.

When I get some free time, I am going to read Basil’s book: Early Exits. He also has a great blog, that includes awesome investment advice & tools. His one-page term sheet has gotten him some good recognition in the industry as well.

I’d love to hear your thoughts on the post & the interview. It would make my day.

Chances are this guy knows more about exits than most anyone you or I know. So what are we going to do about it?

  1. Your welcome Jeff. And thanks for staying tuned. I’ll be getting it also but really am looking forward to reading your review down the road! have a great Friday.

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