Startup Exit Strategy

There is risk assuming that a large vendor will buy you while that same large vendor’s competitors are using your technology service or product.

Example, Symantec, Trend Micro, Palo Alto Networks, and HPE are all customers of your technology. Palo Alto Networks decides that they want to acquire you.

HPE is a competitor to Palo Alto Networks. After the acquisition closes, a product from Palo Alto Networks is now in HPE software, including exposure to all HPE enterprise customers (experience).

This will trigger a competitor acquisition clause in your agreement with HPE. It will bring HPE into the acquisition discussions and require one or more options.

  1. A period where they can move off your technology.
  2. Technology code/content escrow.
  3. Right of first refusal and option to acquire.

Comments

Popular Book Excerpts

The GIVES framework: How to test your growth?

The art & science of great communication

Market Research: Neurodiverse people account for 15% of your target customers