Most startup founders are, rightly so, focused on growing their company, raising financing, and reaching the market. However, decisions and processes put in place early in a company’s life can sometimes have significant effects on a future exit, such as an initial public offering (IPO) or an acquisition (whether before or after an IPO). Decisions around contract terms, intellectual property protection, employment arrangements and recordkeeping, among others, can create significant obstacles to a sale—particularly to a large serial acquirer—or impact an IPO. While these items don’t always have an impact day-to-day on a company’s operations prior to an exit, they can be very expensive to address at the time of the exit and, in the worst case, potentially scuttle a deal.
This session will address some of the key issues that can present problems at the time of an exit from the perspective of buyers and underwriters, and some best practices and actions to take before the exit, to prevent these potential obstacles.