Exit Strategy · Stock Options

Plain vanilla stock cash out vs. creating a fund to sell company shares?

Mauricio Hernández Entrepreneur and Angel Investor

February 27th, 2015

I own stock in companies at different stages with tech as the underlying theme:

1. A a stablished and very profitable IT consulting company with over a decade in operations and customers in Government and Telco.

2. An promising online travel agency startup . It's already making revenue and breaking even.

3. My latest pet project: A recently launched e-learning site. Maybe looking for an investor to share risk and accepting capital would make more sense here.

I'm interested in cashing out and selling part/all of my stock to invest in other companies so I have been considering:

a) Plain vanilla cash out and Sell each individual company.

b) Create a small portfolio (or some other type of investing vehicle) and sell it.

Given the different stages of the companies: how would you recommend to go about it?

Randy Martinez Founder/CEO at Incendiary Games

February 28th, 2015

I have no experience from cashing out any companies but I'm not sure what the value of option B would bring at all. What is your thoughts on building a legal entity for all of this? None of those companies seem to have any overlap. A purchaser may only be interested in company #1 or #2 and not all 3. Due dilligence and closing could take wildly different times based on the complexity and length of operations, especially for company #1. You would probably be quicker to sell them off individually after factoring in due diligence and gain access to some of the proceeds quicker for your new ideas.

Neil Gordon Board Member, Corporate Finance Advisor and Strategy Consultant

March 1st, 2015

You'll have a hard enough time selling any minority interest in a startup; combining them would make a sale nearly impossible.

If you really want out, try company insiders first. 

Karl Schulmeisters Founder ExStreamVR

February 28th, 2015

I'm hardly a financial expert, but I do know that the upside potential for the consulting company vs. anything that scales with technology is sufficiently different that creating a portfolio would be a challenge.  Plus - whom would you sell your portfolio to?

Amir Fouad Entrepreneur: Founder of Vnu Mngr

March 1st, 2015

find out how much you can sell your share for and based on that you will know if its worth it to sell or stay for the long run, as far your startup, if you got serious investor yes sell out and do something you are more passionate about. so dont sell unless you ready for your next move with your new venture investor