Creating exit value in startups making sure you get paid for your hard work
10
Getting Paid for Your Hard Work: Creating Your Desired Exit Value Jackie Hutter, MS, JD Decatur, GA 404-797-8124 www.LeanLegalTeam.com Twitter @ipStrategist
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Transcript of Creating exit value in startups making sure you get paid for your hard work
Getting Paid for Your Hard Work: Creating Your Desired Exit Value
Jackie Hutter, MS, JDDecatur, GA404-797-8124www.LeanLegalTeam.comTwitter @ipStrategist
Why Are You Working So Hard?
Most entrepreneurs today say they want to exit from their business within 1-3 years◦ Key to a suce$$ful
exit is to get an acquirer to love your business as much as you do!
The Goodwill “Problem”Goodwill is that value of your business attributable to intangible assets• Example
• You think your business is worth $50 Million but accountants can only find $10 Million in “hard” assets
• Where does that $40 Million come from?Goodwill is often in the eye of the beholder• You are responsible for demonstrating why
your business is worth all that extra money!
Where is Business Value Today?
70 % or more of business value in form of intangible assets• For “information” companies, likely much higher• If you do not own real estate or equipment, you have
mainly intangible valueBUT-this value does not exist because we say it does• Entrepreneurs (and all business people) must take
affirmative steps to realize the value
Identify
Capture
ProtectLeverage
Realize
To Realize Value Must
Make Your Intangible Assets TANGIBLE
Goal to be able to demonstrate to investors or potential acquirers that
your Business Value is REAL
How Do We Identify Your Intangible Asset Value?
1. What makes Your Business different from its competitors?• What is your unique competitive advantage?
• Identify each and every one
2. Would Your Business be harmed if this difference was lost to a competitor?• If so, you must capture and protect it so that you can
realize it!
Important qualifiers
• Copying is legal and appropriate if you don’t protect your competitive advantage
• Some things are not protectable, but knowing this is the case allows you to plan accordingly
Possible Sources of Your Business' Competitive Advantage
Your Business’ Intangible Asset Value
Patentable Inventions
Trademarks
Brand Equity
Business Processes
Relationships
(Customer/
Suppliers)
Employees
Others Specific to Business
Model
Intangible Asset Business Strategy Process
1. Determine short and long-term business goals• Immediate and likely future competitive issues
• Investment opportunities
• Exit strategy
2. Understand
those elements of
business model that
create competitive advantage
3 . Develop cost
effective, executable intangible
asset management strategy to
allow to maximize long-term business
value
4. Ensure that• You and your team has the skills necessary for strategic plan’s execution
• Appropriate legal and business (if necessary) resources identified and obtained
Bonus from Intangible Asset StrategyThose who can
articulate their business value will be perceived by potential investors or acquirers as having better management skills◦ Will allow you to
standout from others
