@TiEcon 2006: Value Creation, Value Sharing and Value Realization

The session on exits was rather disappointing; I had expected the panelists to dwell on details of negotiations while exiting. They didn’t.
Prema Sagar, Principal and Founder of Genesis Burson-Marsteller spoke about how she built a company by focusing on the clients’ needs. She recommended that entrepreneurs should not take venture capital investment because “then you’re worried about the VC.” VCs don’t allow you to grow slowly and steadily, instead want quick growth. As they grew, Genesis PR built models to establish consistency across offices. Her mantras: Value Creation, Value Sharing and Value Realization. She exited her business because she did not wish to take the risk of raising capital, and yet didn’t want it to stagnate. Burson-Marsteller was one of their international partners, so they already had that relationship established. They discussed it in the organization, and decided to sell everything, or nothing. When she exited, they wrote in total managment control for a specified period of time, into the contract.
Advice from Pradeep Gupta, Chairman of Cybermedia Group, also on the panel – pay attention to the contract and legal papers, else it will come back to haunt you. Engage a good lawyer. The IPO, as we heard often in the conference, is every investors dream exit.
Sanjeev Agarwal, MD Helion Venture Partners spoke about his entrepreneurial experience, and exit from Daksh – a good plan to begin with small customers when you start small, or look for entrepreneurial big companies who might be inclined to give you a shot. It is better to provide good quality for premium pricing. When ramping up, better to decentralize: at Daksh, they seperated into SBUs. When exiting, he made sure that the process did not take long, and they decided to take 20 percent less money, because the employees were in better hands.

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