Once funding is secured to develop a project or a venture, new challenges arise, such as supporting growth, making an exit, or participating in an M&A.
Then, there come the early-stage challenges. We spotted the competitive advantages; we used design and storytelling to generate emotional connections with our potential users or clients, and we used innovative strategies to raise funds .
In the future, there is only growth, and we must deal with it.
“Everyone wants to see their venture or project grow, but few tell you that it is a hard process and that you will most likely fail the first couple of times, especially if you are new to it,” notes Peter Yobo, partner at Credera, a consulting firm focused on strategy, transformation, data, and technology.
With blinders on
“Regardless of what others say, there are basic laws and truths in business that must be learned first. Once you learn that you then have to manage everything that happens around you, the external pressures of running a business, the macroeconomic uncertainty, or other influencing factors,” he adds.
A key element to getting through this stage is to keep a clear vision. “Many times, business leaders listen to many people, everyone has something to say, and they often end up pivoting the product or business direction,” says Yobo. “Sometimes you must know how to put blinders on,” he says.
“But beyond the fact that the road is difficult and that you may fail in your first attempts, growth will come from experience, and the people involved will learn as never before about everything related to growing a business: legal aspects, human resources, supplier management, leadership, administration… you see it all,” Yobo points out. “Those who allow themselves to go through this growth phase are stronger leaders,” he concludes.
When listing the aspects that must be considered to unleash growth, Yobo focuses on understanding the dimension of this growth, always being aware of new challenges, and constantly innovating.
Knowing how to get out in time
When the entrepreneur is more in love than ever with his project, to which he has dedicated endless hours and all his effort, the opportunity for the commercial exit appears: that is, selling his enterprise to another owner or an investment group. “The first thing to be clear about is that you need someone other than the entrepreneur to lead the process, because it is complicated, requires a lot of time and effort and is difficult to overcome, especially from an emotional point of view, which often leads to the conceptual error of the gradual exit,” says Julie Keyes, a consultant specializing in business exit.
For Keyes, key components of a successful exit process include a strong team of advisors covering, in addition to the exit itself, legal, tax and estate issues. “The earlier you start planning, the more options you will have to maximize a successful outcome,” she says.
Among other things, owners must understand the best time to carry out the transaction and, most importantly, the following steps. “After the exit, life goes on: it is important to establish what will be done with the free time, with the developed skills, with the accumulated experience, or with the contacts made”, the expert adds.
“From a business standpoint, beyond the current owner leaving, we also need to ensure conditions going forward: if the business is ready to transition and that we have the right leadership and talent in place: if for some reason the conditions are not in place, it’s better to take some time before derailing the operation,” Keyes elaborates.
The M&A path
Another way out is through mergers and acquisitions. “The first step that needs to be taken is to educate venture owners on how this process works,” notes Lindsey Wendler, one of the 25 most influential women in the M&A field, according to Opus Connect.
It starts with an auction in which potential buyers are identified to make the best offers. This is followed by a detailed analysis of the most solid or best aligned with the proposal. They are thoroughly examined, and meetings are held between the potential buyers and the organization’s management to reach the point where the letter of intent is presented. Only one is selected, and the due diligence process begins, “the least fun part for everyone,” jokes Wendler.
Depending on the outcome, negotiations tip one way or the other, and with a headwind, a deal is struck. “In general, people hear about the end of the process, but few know how stressful the road is. I have always warned my clients that they will have a nervous breakdown sometimes,” warns Wendler.
The first season of our podcast Beyond Alchemy gives a framework. It deepens the critical issues for anyone who wants to start and manage a project from start to finish, from the idea’s conception to the commercial exit, always considering the opinion leaders. If you haven’t done it yet, we invite you to listen to all the episodes: https://beyondalchemy-podcast.makingsense.com/