This is from Australia but contains a number of statements that are true on a global basis:

  • Most exits over the next five years for start-ups are expected to be trade sales
  • Venture capital firms or investors investing in the start-up space can effectively start earlier and exit earlier because start-ups require less capital to get started than ever before
  • Most businesses are not suitable for venture capital - only 0.5% of new companies convert into a business of sufficient scale to list on a stock exchange or execute a trade sale

In FirstCapital's experience, companies tend to get a much better result in terms of exit when their potential buyers know who they are and why they are valuable to them. If the likely exit event is a trade sale, therefore, we would advise companies to start thinking about who will buy them, and making themselves relevant to their buyer community. An exit is a process, rarely an event.