Latest news with #exits
Forbes
a day ago
- Business
- Forbes
Looking For An Exit? Five Mistakes To Avoid
Dr. Keegan Caldwell is the founder and global managing partner of Caldwell. Over the years of guiding companies through exits—from scrappy startups to established tech giants—I've watched too many brilliant founders torpedo their own valuations with mistakes that could have been avoided with proper planning. The stakes couldn't be higher. Bain & Company recently found investments and exits are "up 37% and 34% respectively," but for companies that managed to close last year, more than a third had been on that road for over two years. Only 21 exits last year exceeded $1 billion in value, with large, return-generating exits far more scarce than smaller deals. The fact is, many founders are making the same preventable errors that can cost them millions in valuation and, in some cases, jeopardize the entire deal. Here are the five most damaging mistakes to see and how you can avoid them. 1. Treating IP As An Afterthought The most expensive mistake founders make? Failing to get their intellectual property house in order before starting exit conversations. I've seen deals collapse entirely because buyers discovered that key IP wasn't properly assigned to the company or was entangled in licensing disputes that would take years to resolve. This goes beyond filing patents. Your IP audit should include employee invention assignments, contractor agreements, open-source software usage and any third-party licenses that your technology depends on. The problem often traces back to the early days when founders were focused on building rather than documenting—but those shortcuts become expensive roadblocks when buyers start their due diligence, which ideally begins at the onset of exit negotiations. Maintaining a clear, organized IP portfolio from the start is ideal. But if you don't have this, I recommend you start your IP cleanup at least two years before you're planning to kick off exit discussions. This gives you time to fix any gaps, file additional patents for recent innovations and make sure all your documentation is rock-solid. Remember: Buyers aren't just acquiring your current IP; they're betting on your ability to defend it against future challenges. 2. Financial Opacity That Kills Buyer Confidence Clean books are crucial for financial transparency, telling a story through your numbers that buyers can actually understand and trust. Too many founders think they can polish their financials during due diligence, but sophisticated buyers spot inconsistencies right away. Common issues I see are revenue recognition problems, especially with SaaS companies that haven't properly accounted for subscription revenue, and undocumented expenses that make buyers wonder about your financial controls. Buyers also want to see predictable, recurring revenue streams, not one-time spikes that make your numbers look better than they are. Invest in proper accounting systems and regular financial audits well before you're ready to exit. Document your revenue recognition policies, keep detailed records of all expenses and be ready to explain any weird stuff in your numbers. The companies that get premium valuations are the ones where buyers can clearly see the financial trajectory and trust the systems generating those numbers. 3. Ignoring Cultural Due Diligence Buyers aren't just acquiring your technology or customer base—they're inheriting your team, your culture and your operational processes. Cultural misalignment is one reason acquisitions can fail to deliver expected value, yet it's often overlooked during exit planning. Smart buyers conduct extensive cultural due diligence, interviewing key employees, assessing retention risk and evaluating whether your team can integrate successfully with their organization. Companies with high employee turnover, poor management structures or toxic cultures can get heavily discounted or passed over entirely. Therefore, start building a scalable, documented culture early. This means clear policies, documented processes, strong management practices and measurable employee satisfaction. Buyers want to see your company can operate effectively without the founder's daily involvement—because that's exactly what they're buying. 4. Overestimating Market Interest The biggest ego trap in exit planning is assuming multiple buyers will compete for your company. Most founders dramatically overestimate buyer interest, leading to unrealistic expectations when it comes to timing, valuation and negotiation leverage. The reality is that there are typically only a handful of logical buyers for any given company, and they all have specific criteria, timing constraints and competing priorities. I've seen founders turn down solid offers while waiting for better ones that never materialize, then watch their leverage evaporate as market conditions shift. Conduct realistic market analysis before you start the process. Identify your most likely buyers, understand their acquisition criteria, review their recent deal history and have honest conversations about what makes your company attractive to them specifically. 5. Holding On Too Long The most painful mistake is waiting too long to exit. I've seen founders who've built incredible companies they intend to exit from hold on well past their peak, watching valuations decline as competitive pressures intensified or market conditions changed. This often stems from emotional attachment or unrealistic expectations about future growth. Founders can fall victim to the mental trap of convincing themselves they need "just one more quarter" to hit certain metrics. The fact is, market windows can close quickly. The companies that achieve the best exit outcomes are often those that sell while they're still growing, not after they've hit a plateau. Develop clear exit criteria early in your company's life. This might include reaching a certain revenue threshold, achieving market leadership in your category or simply recognizing when you'll have taken the company as far as resources allow. Think about why you want to exit, write that down and stick to it. The best exits happen when you're selling from a position of strength, not scrambling to find buyers because you're running out of runway. Your Exit Starts Today The most successful exits I've orchestrated began years before the actual transaction. Every decision you make about IP protection, financial systems, team building and market positioning either strengthens or weakens your eventual exit position. Start thinking about your exit strategy now, even if it seems far away now. The companies commanding premium valuations and achieving successful transitions are those building with the end in mind, not those trying to retrofit exit readiness. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Wall Street Journal
5 days ago
- Business
- Wall Street Journal
Exits Lift Carlyle in Second Quarter as Firm Sees Better Market Conditions
Carlyle Group is defying the recent slowdown in private-equity exits, and firm executives say the market for selling assets is finally getting better. The private-equity firm's second-quarter profit beat analysts' expectations Wednesday, sending its shares up nearly 4% midafternoon.
Wall Street Journal
04-08-2025
- Business
- Wall Street Journal
This VC Firm Is Striking Gold, Reaping $11 Billion From Figma, Other Startups
Index Ventures, a venture firm with origins in Europe, is the envy of Silicon Valley. A string of large startup exits could send more than $11 billion in proceeds to Index and its limited partners at a time when the venture market overall is still struggling to generate cash.
Times
18-07-2025
- Business
- Times
Bridgepoint returns £2.6bn to investors
The owner of Burger King UK has shrugged off reports of indigestion in parts of the private equity industry, saying it was confident of 'a strong pipeline' of planned exits over the next 18 months. Bridgepoint returned €2.6 billion to fundholders by successfully crystallising investments in private companies in the first half and expects to achieve 'multiple exits' in the second half and in 2026, it said. Alongside Burger King's master franchise for Britain, Bridgepoint's investments also include a cruise holidays booking platform and Cambridge Education Group, the private schools operator. Outside the UK, its assets include Rovensa, a Spanish agricultural biotech business, and Vermaat, the Dutch restaurants and catering group. Bridgepoint reports results in sterling, assets in dollars and some fundraisings in euros. It posted a 39 per cent fall in pro forma pre-tax profits to £60.6 million in the first six months of 2025, after adjusting for the £835 million acquisition of the energy infrastructure fund manager Energy Capital Partners (ECP) last year. Assets under management increased by 20 per cent to $86.6 billion. Some private equity groups are struggling to exit investments through flotations because of a lack of appetite from listed world investors and are increasingly relying on trade sales and so-called secondary deals — passing on businesses to another private equity house or just switching them to a new fund. Raoul Hughes, chief executive, said that while the backdrop was 'challenging', Bridgepoint rarely opted for flotations, the last mainstream one being Safestore in 2007. He said he expected to announce some asset sales imminently, while others were still being dusted off. 'We're getting them ready,' he said. He detected strong potential buyer interest and 'at good earnings multiples', adding: 'Buyer appetite is there.' Bridgepoint, a member of the FTSE 250, traces its roots to the private equity division of NatWest. It floated in 2021 and manages assets including private credit and energy projects as well as its mainstream private equity division, which specialises in mid-sized companies in Britain and Europe. The group also announced good progress in raising fresh funds from new and existing clients. It was confident of meeting its target of €24 billion by the end of 2026. Hughes said the tilt towards Europe and away from the US since the Trump 'liberation day' tariffs shock should increase appetite for European private equity. He was pleased by the performance of ECP in its first year under Bridgepoint ownership. While there were headwinds from the decline in values of renewable energy assets, the division was well positioned to take advantage of the push to modernise America's electricity supply infrastructure. The shares slipped 4¾p, or 1.4 per cent, to 350p in afternoon trading on Friday. Bridgepoint was floated at a 350p issue price but investors have had a shaky ride after the shares dropped to as low as 169p in 2023. Analysts at Investec said it was 'overall a strong first half'. An interim dividend of 4.7p was in line with expectations, with Bridgepoint guiding to a final payout of at least 4.7p as well.
Wall Street Journal
10-07-2025
- Business
- Wall Street Journal
Europe Leads the Way in Private-Equity Deal Activity This Year
Private-equity firms are flocking to Europe, making it the most active exit market by number of transactions this year and the only region that saw deal activity rise in the second quarter, according to preliminary data. Research firm PitchBook Data tracked 515 exits in Europe in the first half of 2025, compared with 494 exits in North America. In all of 2024, Europe had 1,517 exits, compared with 1,432 in North America.
