Silicon Valley Business School
Milestones En-Route to Asset Sale
New technologies and inventions are best created by small, independent developers, however, they are best commercialized by large organizations with deep pockets and established routes to market. Some small developers grow into large corporations taking the route from Zero-to-IPO, but for many this is not possible, or doesn’t make sense. The short sprint from Zero-to-Asset Sale is a completely different route—it involves building a company to sell from the ground up with the focus on creating assets and packaging them in a way that best appeals to a corporate buyer.

At its most basic level, there are only three components to a successful business: a great product, a market of paying customers and a route to market that connects them together. (Route to market = distribution channel + sales force + brand name + executive team + administrative system + everything you need to deliver the product to your customer).

Building a great product can take a couple of years of focused research and development. Building an effective route to market can take decades. Building a market of willing customers is something best left to the Gods—even Bill Gates has little influence over this component.

Whatever your product, there are sure to be a number of existing companies out there with established routes into your market. Even if your product is unique and way ahead of the pack, your target customer is certain to have some form of existing trading relationship with other suppliers. So here’s an idea:

Focus your startup on building a great new product and combine it with another company’s established route to market.

Your product should benefit from your undivided attention, and your partners’ route to market is probably much more established than anything you’re likely to build yourself within the time frame available.

This idea is certainly not new. However, it’s an idea that’s sure to become increasingly popular as it grows ever more costly and time consuming to build new routes to market from the ground up. For an online technology trading exchange that’s frequented by technology buyers check out Tynax.

Notes about Milestones

Milestones have to be achieved in parallel—when reviewing these milestones, it's important to recognize that the process is not entirely serial. Management has to work on several milestones in parallel.

Milestones are different for every company—the list of milestones has to be tailored for each company to reflect its specific market, technologies and challenges.

Milestones have dependencies—some milestones cannot be commenced until others have been successfully completed.

Select an Asset Sale Milestone:
  • Write a Business Plan
  • Take the Leap: Commit Full-Time to Your New Venture
  • Hire a Good Startup Law Firm
  • Form the Founding Team
  • Form a Corporation
  • Find a Good Bank
  • Hire a Good Firm of Accountants
  • Recruit an Advisory Panel
  • Select a Good Company Name
  • Formulate Core Messaging & Corporate ID
  • Develop Product Prototype
  • Test the Market
  • Seed Customers & Document their Positive Endorsements
  • Lease an Office
  • Create a Stock Option Plan
  • Publish a Technical White Paper
  • Close Seed-Round of Funding
  • Create and Launch your Web Site
  • Launch the Company
  • Close Sales Agreements

  • Steps: Selling a Company or its Assets

  • M&A Process: Take Decision to Sell the Company as a Cash-Generating Business (Cash-Flow Sale)
  • Take Decision to Sell the Company for its Product/Technology Asset (Asset Sale)
  • Pick M&A Team
  • Prepare your Paperwork
  • Dress the Company Up For Sale
  • Identify Potential Buyers
  • Approach Buyers
  • Present to Buyers
  • Negotiate Terms
  • Agree Terms
  • Board And Other Approvals
  • Prepare Agreements
  • Complete Due Diligence
  • M&A Process: Close the Sale of the Company as a Cash-Generating Business (Cash-Flow Sale)
  • Close the Sale of the Company for its Product/Technology Asset (Asset Sale)
  • Meet the Parents -- Company Integration