Exit Strategies for Entrepreneurs

Startup LAWnchpad is the podcast that educates entrepreneurs about forming, growing, and protecting a startup. Startup LAWnchpad is produced by the Entrepreneurial Law Clinic at Fordham University School of Law in New York City.

Episode Description: 

Lauren Hutwelker (Fordham Law ‘23) and Arman Borazjani (Fordham Law ‘23) interview Darren Bartlette, Associate, Manatt, Phelps & Phillips, LLP about exit strategies for entrepreneurs. They cover what the options for exit strategies are, timelines for their effective implementation, and the common pitfalls that entrepreneurs need to avoid.  

Episode Roadmap:

• [:34] Third year Fordham Law students Lauren Hutwelker and Arman Borazjani introduce themselves and their guest Darren Bartlette and offer an overview of today’s episode. 

• [1:52] As a startup lawyer, Darren helps entrepreneurs at every stage from formation and financing to exit. 

• [2:26] Defining exit strategy options for entrepreneurs and the various reasons founders may be looking at exiting. 

• [4:22] Legal and business considerations for owners when selecting an exit strategy. 

• [5:29] The role that lawyers can play in executing an exit plan. 

• [7:28] Steps to avoiding common legal pitfalls facing entrepreneurs when exiting a business. 

• [10:07] M & A deals have the potential of being delayed if the IP assignment agreement isn’t properly formalized. 

• [11:32] The importance of completing the due diligence process in its entirety. 

• [12:54] Timelines for formulating exit opportunities and when to include them in founder agreements.  

• [15:48] Common exit strategies during an economic downturn.

• [17:25] Advice for founders facing an involuntary exit and common trends during the recession. 

• [19:07] The ideal timing of a voluntary exit depends on a variety of factors. 

• [20:36] Considerations for founders who are interested in early exiting. 

• [23:08] Darren’s book recommendations for entrepreneurs.

Tweetables:

• “Exits don’t always mean that a company is doing well.” - Darren Bartlette

• “Founders should consider how much involvement they want to have in the future of the company.” - Darren Bartlette

• “It’s very important for companies and entrepreneurs to stay organized for any exit event.” - Darren Bartlette

• “A $5,000 mistake today could turn into a $15 or $20,000 mistake tomorrow.” - Darren Bartlette

• “Founders should be thinking about exit opportunities early on.” - Darren Bartlette

Mentioned in This Episode:

• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendleson

• Shortcut Your Startup: Speed Up Success with Unconventional Advice From the Trenches by Coutney and Carter Reum 

Additional Resources:

• Fordham’s Entrepreneurial Law Clinic

• Follow us on Twitter @FordhamELC

Sponsors:

• Nasdaq Educational Foundation

• Fordham’s Entrepreneurial Law Advisory Council

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