Re: M&A Advisor Fees | M&A Transaction Costs

FromTechvibes — Wed, 24 Jun 2009 09:10:19 -0000

Mark Groulx said on Tue, June 23, 2009 at 1:02 PM

We are in the business brokerage business and I would say your analysis was pretty good. I would say 5% is a rough number for the $5 to 20 million range and then goes down from there. Could be a little more on the low end of the range.

http://www.techvibes.com/bl...

Re: Commens on Early Exits by Basil Peters

FromTechvibes — Sun, 10 May 2009 13:09:58 -0000

Basil ... a friend, Peter Kinash, let me read your book, Early Exits. As a CEO heading out to raise our first round of outside capital for http://www.mob4hire.com, it was very useful to help me understand what I can expect; of investors as well as myself. Thanks for the AWESOME insights!

Stephen King
CEO
Mob4Hire

Re: Why VCs Will Block Good Exits

FromTechvibes — Mon, 19 Jan 2009 22:06:46 -0000

David McIntyre said on Mon, January 19, 2009 at 10:03 AM

Full, disclosure - I'm a former member of the VC industry and still involved in investments and acquisitions. As many in Vancouver and Canada can tell you, I probably excelled more at the numbers side than some of the investment decisions side of the industry

First, a technicality so we don't get wires crossed - a 3x (or a "triple") would never be referred to as a 300% return in VC-speak. You use "x's" (2x, 20x, etc.) for multiples, and % (20%, etc.) for IRRs (effective annual return rate). Any VC that didn't take 300% over a "normal period" 3-7 years would be insane (particularly in Canada), but not taking 3x depends on lots of things.

I have seen this happen from both sides (entrepreneurs sometimes don't see the writing on the wall either) and as a fight between new and old VCs in a deal. This is SO situation dependent that a general discussion I put more in the category of fear mongering than anything else. Once you take venture money you are no longer the sole owner. You take that money likely with other terms and conditions (see Restrictive Covenants on your terms sheet). Angels do equally "odd" things. Any owner will do what they think is in their best financial interest at any time - why do you think VCs moan about founders as much as founders moan about VCs. Same things happen between Series A VCs and Series C (or G, AA, or my favourite - EE) round investors.

I do agree with the underlying point though, VCs are not in business for doubles and triples, the model demands shooting for 10-20x. That said, most (especially Canadian) VCs, especially these days, will take the bird in hand vs gambling on what's in the bush.

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Re: M&A Advisor Fees | M&A Transaction Costs

Re: Commens on Early Exits by Basil Peters

Re: Why VCs Will Block Good Exits