Exit Strategies for Start-ups: TiE Event

I attended a TiE (The Indus Entrepreneur) event tonight. There were 3 speakers-

• Dan Avida, General Partner, Opus Capital (ex-CEO Decru)
• Joshua Pickus, Senior Vice President & GM, Computer Associates (ex-CEO Niku)
• Tom Berquist, CFO, Ingres Corporation (previously Securities Analyst at Citigroup)
  

Dan Avida sold Decru to Network Appliance for $272.5M; Josh Pickus sold Niku to Computer Associates for $350M.

The two entrepreneurs had built real businesses and lived through the tech bubble of the late 90s. Their key advice was to look through the buzzwords and focus on building a real business. They were only interested in start-ups with the potential of being $100M revenue business in 5-8 years. Even though exit via M&A (Mergers and Acquisition) is a valid option to explore- it should not be your intended purpose as a startup looking to get funded.

They unanimously agreed that a startup pitching itself as a perfect acquisition candidate with no potential of being a business on its own is not interesting to them. Of course, they do evaluate startups as potential acquisition candidates but as they said "Leave that to us. Focus on building a real business."

The most interesting thing I learnt was how EFI was founded. It was a hack to get Canon color copiers to publish documents from the computer rather than from its internal scanner. This hack later became a 'print driver' software that EFI started selling. Today its a $600-700M business with 700+ employees. Dan was clearly a visionary entrepreneur and a very impressive speaker.