Included VC ’23 Insights - Exits by Michael Labriola
Yesterday evening, I attended another insightful masterclass by Included VC, this time on Exits 🏁🔚, led by Michael Labriola, a Partner at Wilson Sonsini Goodrich & Rosati, a global legal advisory firm for technology and life sciences.
Here are a few standout takeaways:
💡 Cap Table Alignment: Early alignment among shareholders on the preferred exit is crucial. VCs should communicate their expectations clearly from the start.
💡 IPO Insights:
- Companies with clear performance patterns, predictable revenue, and up-to-date financial reporting are the best IPO candidates.
- IPOs are challenging, expensive, and time-consuming, with a lock-up period of 6–12 months.
- Avoid giving a dual mandate (IPO and sale) to a banker to prevent conflicts of interest; their commission is higher if they pursue a sale.
💡 US vs Europe VCs:
- US VCs have a rich history in growth-to-IPO investments, while European VCs often lean towards private equity and secondary sales.
- Having both US and European VCs in a cap table can lead to challenges if alignment is lacking.
💡 Current IPO Trends:
- The IPO window is largely closed for the next year, with exceptions for big players like Instacart and ARM.
- Strong companies will secure investments to sustain until the IPO window reopens, but B/C series companies may face challenges.
- Expect an uptick in exits as companies seek funds and may accept devaluation.
- The short-term outlook is bearish, but long-term prospects are highly optimistic. The key is navigating the next 6–8 months.
💡 Key Resource: startupcompanylawyer.com
Once again, a big thank you to Nikita Thakrar & Anu Panesar for coordinating and my amazing cohort for the interactive session.
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Included VC is the first of its kind (fully funded) global Fellowship for individuals from overlooked & diverse communities. Mission: To change the face of the VC industry, dramatically increasing diversity and maximising fund success by transforming networks, staff, deal flow and investments. Included VC is committed to creating effective multi-generational change.
Included VC is supported by an international consortium of venture capital partners and sponsors including BITKRAFT, Creandum, Daphni, European Investment Fund, KAYA VC, K Fund, HSBC Ventures, HV Capital, Mouro Capital, Mangrove Capital, M12 — Microsoft’s venture fund, Notion Capital, Seedcamp and Wilson Sonsini.
