SBE Community June Growth Topic: Planning for An Exit

Following an oversubscribed session we did with our SBE Alum and Expert advisors, this month we are sharing key insights from our trusted Advisory Collective on all things Planning for an Exit.

The Founder lens with Megan Owen from Microwd.

Megan is Head of Equity crowdfunding for Finley Capital Partners and heads up growing MiCrowd. As a woman CEO and Founder, Megan is part of the SBE Australia Community as well as an Advisor in the SBE Advisory Collective with Finley Capital Partners and MiCrowd. She works with founders and teams of early-stage companies seeking to raise growth capital via equity crowdfunding to ensure they optimally run a crowd sourced funding campaign. Megan has worked in investor relations and senior strategic communication roles for 25 years in multi-nationals across banking and finance, technology, energy, and professional services. With experience as a Co-founder and Chief Marketing Officer of a US based technology company, Megan brings extensive insights to founders relating to scale up, capital raising and managing investors from Seed to Series A and finally an exit at IPO.

Here is what Megan told us about her experience taking a business to IPO...

Planning a firm's exit can be a difficult and clarifying process. It is crucial to make sure that the value of the company is maximised and that it has a clear future once the owner departs. Here are a few actions to do as you begin arranging a company's exit. Since you need some income to effectively establish your financial metrics, it is ideal to start this process after a successful seed raise and before a Series A.

It is crucial to first establish the exit value you want to attain and a timeframe, then develop some financial models to determine the metrics you need to accomplish this value and if it is realistic, build some other scenarios with different valuations to establish what is genuinely achievable. Once you have decided on an exit strategy, it is time to start the process of finding potential acquirers, start conversations, test your measurements in real-world situations once this feedback is obtained, adjust your models and focus on the metrics to deliver the exit valuation.

Key things to do as a part of your everyday business, keep accurate financial records and when you can appoint an auditor, always keep your Data room up to date and stay laser focused on your revenue targets to achieve your set valuation outcomes, continue to monitor competitors and industry trends, stay relevant and make your business attractive to buyers.

While this is a very basic outline of the process, the sooner your start the better the outcome

The Investor Relations and PR lens with Jane Lowe from IR Department.

We asked Jane what founder who are are considering taking their company to IPO should keep in mind, and she shared three (possibly surprising) tips:

1. Sense check that you’re ready to list. Is your company of a maturity stage to satisfy key investor and exchange tests? Some examples of this include Annualised Recurring Revenue volumes for tech companies, or clinical stage for biotech companies.

2. While pre-IPO marketing, book-building, pitch decks and prospectuses are important, think past listing day to consider the full plan from pre-IPO through to post listing. Critically, consider life post-listing. What is your plan for updating and engaging with the market and retaining interest and attention from investors? Also, understand your reporting obligations, news flow plan, promotional opportunities and your outreach calendar.

3. Make sure your team is trained on what they can say legally through the IPO period, as well as what it means to be part of a listed company. What can be said in the media? What can you discuss with mates at barbeques? What might be “material” and therefore must remain internal knowledge only until its ready for announcement to market? What are your trading rules and who can the team ask for more info?