When raising capital for your next business venture, think about the shorter term early exit strategy as a possible approach. Ben Yoskovitz explains this strategy involving a lower initial capital investment and an exit by the founder in 3 to 5 as opposed to 7 to 10 years owning a considerably bigger piece of the company. Ben says early exits are more popular with angels and founders than with VCs, who prefer to invest larger amounts over a longer period. Still, Ben adds, the early exit venture offers the opportunity for a founding entrepreneur to get out early with what he calls "life changing money" and the chance for an angel investor to see a rapid and excellent return.
Raising Capital For Early Exit Companies
Posted by ShawnHessinger under Raising CapitalFrom http://www.instigatorblog.com 5066 days ago
Made Hot by: shepherd on June 6, 2010 10:24 pm
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Comments
5066 days ago
5066 days ago
It seems like a great idea for a founder or majority shareholder. The only drawback I can see is that seeing a founder or majority shareholder, or even just someone with a great deal of assets in the company, is the effect that it would have on shareholder and investor confidence. It could start a flood of people getting out, and seeing the big guys bail could affect the confidence of potential new investors.
Yoni