

The Art and Science of Small Exits - rokhayakebe
http://www.instigatorblog.com/the-art-and-science-of-the-small-exit/2009/02/04/

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mixmax
Small exits are interesting, and overlooked. I see the following reasons for
this:

\- acquisition price for companies probably follow a power law curve, meaning
lots of small acquisitions and far fewer large acquisitions or IPO's. Size of
companies follow a powerlaw, so there's a good chance acquisition size does
too. I haven't seen any research on the subject though. This distribution
means that your chance of a small exit is significantly better.

\- VC's invest too much money. If they invest $10 mill. in a company and
expect a 1000% rate of return on successful exits they (and therefore you)
have no choice but to go for the scarce big acquisition or IPO's.

\- your life will improve if you make $ 1 million, but you won't get much more
happiness from $100 million. So why gamble?

~~~
goodgoblin
I definitely benefited from the article though - seeing as how this is the
endgame for so many startups it is somewhat surprising that we see so little
about this part. I guess its a little like the wedding night - everyone knows
you got married, but that bit is held very close. Is it b/c of non-disclosure
agreements? Tons of companies have gotten acquired and aside from the reddit's
story a few years back I don't remember seeing or reading alot of those tales,
though I wish I could. It would make great bedtime reading or anytime reading
really, something to help keep hope and keep going.

And I agree, $1 million would make my life better, but really, I thought the
first $20 million was supposed to be the hardest.

------
Edinburger
For those of us who want to target a small exit, it would be great to hear
about small exits made in the last year and who made the acquisition. This
article mentions a few. Does anyone on here know of more?

~~~
jbenz
This is a good place to start:

<http://www.crunchbase.com/acquisitions>

The left sidebar has a list of Top Acquirers. Of course most of the prices are
not disclosed. Off the top of my head, these YC startups had exits that are
unknown, but are probably under $20 million:

Anywhere.fm: [http://www.techcrunch.com/2008/01/28/imeem-gobbles-up-a-
youn...](http://www.techcrunch.com/2008/01/28/imeem-gobbles-up-a-young-
startup-anywherefm/)

Clickpass: [http://blog.clickpass.com/2008/12/19/clickpass-is-being-
acqu...](http://blog.clickpass.com/2008/12/19/clickpass-is-being-acquired/)

Omnisio: [http://www.techcrunch.com/2008/07/30/google-acquires-
omnisio...](http://www.techcrunch.com/2008/07/30/google-acquires-omnisio-to-
spice-up-youtube/)

~~~
Edinburger
Very useful - thanks!

