Want to Attract Venture Capital? Have an Exit Strategy

Perhaps the most discouraging aspect of the World Aquaculture Society‘s Aquaculture America 2012 event in Last Vegas was the organizers’ inability to attract financial types to come and talk to the more business-focused sessions.  This doesn’t speak well for venture capital’s perspective of aquaculture (at least in North America) as an area rich with opportunity.

Dave Conley, one of the speakers at the “Creative Financing” session and founding partner of the Aquaculture Communications Group in Ottawa, Canada, at least was able to speak with someone in the venture capital world and bring back some VC wisdom to the session  — the most interesting of which to me was the question: Do you have an exit strategy?

This should be a more obvious consideration than it is, and I have to admit that I hadn’t really thought as much about it as I should have. You can spend an awful lot of time on a well-thought-out, clearly articulated business plan, but if your endgame is to pass a profitable business on to your children and grandchildren, why should VCs care? They are in the business of identifying undervalued enterprises, taking an ownership stake, making them successful, and selling them within a clearly defined timeframe.

This is not to say that creating a profitable, sustainable business is not a worthwhile goal — it is only to say that if that is your goal, pursuing venture capital is not going to be a good way to spend your time and energy.

“But where will I get financing?”

Your best approach might be to step back and study other, non-aquaculture entrepreneurial ventures that have been successful and learn what you can from them. Are you producing low-volume, high-value products for sale into a local or regional market? You might be able to steal some plays from successful small wineries or micro-breweries. Do you have a successful operation that you are looking to expand?  Perhaps you could explore partnering with your vendors or customers with an eye toward mutual benefit.

Maybe finding funding isn’t your real problem. Think about it.

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One Comment on “Want to Attract Venture Capital? Have an Exit Strategy”

  1. Jim Says:

    Thank you for sharing this exit strategy focus. It is critical to the sustainability matrix that the next best use for the facility and its facilitation be built into the entrepreneurial plan. Cradle to cradle (McDonaugh et.al) conceptualization is self-evident in properly engineered MRAS design and implementation. Adaptability will be a continuous process in exercising resource fulfillment. The exit strategy’s greatest appeal is abundant expansion. Prototype, Proof, Production, Process, Promote, Pronounce, Propel, Provide

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