Investment Banking Advisor Points to the Exit for Venture-Backed Startups

6/23/10Follow @bvbigelow

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more cash with higher stock price and opening of a battened-down hatch, there is more of a ‘let’s get back to work, let’s get goin’ and do some deals attitude,” Fletcher says. He offered this advice to the startup CEOs in the audience:

—Build your company for an IPO, but expect it to be a sale. “As I tell people,” Fletcher says, “We need to build this business like we’re going to own it forever—because if we don’t, we will.”

—Don’t be seduced into taking your company public too early. It can create problems in terms of limited trading liquidity, limited research and trading sponsorship, higher costs, and a valuation penalty.

—The best companies are bought, not sold. By this, Fletcher says he means, “You want somebody to come to you to buy your company.” To accomplish that, he says it’s important to form business development relationships with larger corporate partners, so your company comes to mind when big companies start shopping for acquisitions.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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