1. EXIT
STRATEGIES
Luke
Roush
Managing
Partner
–
Sovereign’s
Capital
December
5,
2013
1

2. SOVEREIGN’S
CAPITAL
 Focus
on
Healthcare,
IT/
Telecom,
and
Consumer
Products.
 Focus
on
companies
with
validated
business
model
and
success
to-­‐date.
 Focus
on
strong
values
alignment
and
positive
social
impact,
informed
by
faith
background
of
partners.
2

3. WHY
DO
I
LIVE
IN
JAKARTA?
3

4. WHAT
IS
AN
“EXIT”
(AKA
“LIQUIDITY”)?
4

5. WHY
DO
EXIT
STRATEGIES
MATTER?
 To
the
entrepreneur…
 To
the
management
team…
 To
investors…
5

6. MATCHING
THE
EXIT
STRATEGY
WITH
THE
BUSINESS
–
NOT
‘ONE
SIZE
FITS
ALL’
 Debt
Liquidity:
 Is
usually
structured
 Can
be
term
structured
loan,
or
balloon,
or
creative
and
more
equity-­‐like
 ‘Convertible
Loan’
à
loan
that
converts
into
equity
at
some
point
in
time,
at
some
price…it’s
all
negotiable.
At
this
point,
see
below.
 Equity
Liquidity:
 IPO
 M&A
 Buyout
 Mgmt
Buyback
 Cash
Flow
Business
6

7. EQUITY
LIQUIDITY
 Management’s
View
of
the
World:
 Timeframe
&
Return
Expectations
 How
are
different
classes
of
equity
treated?
 Your
Role
post-­‐sale?
 Investors’
View
of
the
World:
 Timeframe
+
Risk/Return
Continuum
 Buyer’s
View
of
the
World:
 Strategic
vs.
Financial?
7

8. KEY
POINTS
 The
business
and
the
market
should
direct
your
planning
around
exit
strategy.
 More
pathways
/
buyers
for
your
company
is
a
good
thing.
If
you
only
have
one
buyer
/
one
exit
pathway,
it’s
not
good…no
leverage.
 Investors
can
be
very
helpful
advisors
in
this
planning
process,
but
they
can
also
be
overly
meddlesome…beware.
 Plans
are
important,
but
be
prepared
for
change.
Talk
about
expectations
openly
with
investors…upfront
and
ongoing
as
things
evolve.
8

9. EXIT
STRATEGIES
Luke
Roush
Managing
Partner
–
Sovereign’s
Capital
December
5,
2013
9