Our From The Trenches series is back with its seventh edition, covering exit strategies. Follow along with this weekly blog series on Twitter using #FromTheTrenches, and send your VC-related questions to our experienced team!
Q: When does OIF seek to exit investments?
A: Having exited more than ten companies for hundreds of millions to billions of dollars in market cap, I find one thing to always be true: Companies are bought, not sold.
The timing may be uncertain, but as entrepreneurs create highly unique and valued capabilities that feed into an attractive market and rapidly gain customers, good things happen. Often times, a strategic partner will sign on with a startup company, and after successfully collaborating for a period of time, they’ll propose marriage–or in other terms, an acquisition.
Typically, companies that achieve at least ten million dollars in revenue have a successful outcome. But while that amount of revenue is helpful, it is not always necessary. For example, a startup can be a highly unique company in a new market that is on the verge of exploding–say, VR/AR or AI/ML. The entrepreneur should keep their head down, become the most highly differentiated solution in a market by solving huge pain points, disrupt or transform markets, and grow their customer-base rapidly. If they successfully accomplish this, many exit opportunities will likely materialize over time.
-Bill Baumel, Managing Director at the Ohio Innovation Fund