Roger Royse - Today’s Start-ups need to prepare for Exit Early

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Roger Royse, Attorney-Royse Law Firm discusses why many Start-up companies have a shorter life span and they must be very attuned to having an Exit Strategy right from the start.

Transcript: 

Roger: Start up companies, if they expect that they're going to get institutional funding like a lot of them do, have to anticipate a fairly early exit because their venture capital investors are managing funds that have definite endpoints, those funds term out. What happens is, as they get to the life of the end of the fund, or as they hold an investment for awhile, they're going to get increasingly demanding about seeking the liquidity of that. So, even though the founders might like to stay in the company for a long time, you can expect that the investors are going to want to see an exit, in other words, the sale of the company, certainly within 5-7 years. Now, having said that, I've got companies, legitimate startup companies, that have been my clients for 15-20 years. It just turned out that it was a good cash business and they just hung onto it and didn't just build it to sell. But, the typical startup, they expect a pretty fast exit, especially these days. 

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