Jul 30, 2019
Legal basics for startups
Ariel Luedi is no politics, no bullshit, and all thrill! Despite being instrumental in one of the greatest exits in Swiss history when Hybris sold to SAP for 1.5 Billion, Ariel, a firm believer in practice makes perfect, feels more comfortable advising on jumping out of planes than exits. Now as the founder of Hammer Team, Ariel is able to candidly distribute his wealth of knowledge to the companies which they invest in. Nonetheless, we extrapolated the essence of Ariel’s message below. So, tune into your belief and buckle up your parachute for this description into the three T’s of jumping out of planes and how it applies to your startup.
Even a story built around the best idea or plot twist relies on compelling characters to make it worthwhile, and success in your startup is no different. We will preach it till the cows come home, team is everything! When it comes to deciding if you’ve reached the critical height and the timing is right to jump (sell), it’s your team who will be there with you, going all in or not, investing their efforts during challenging times.
Despite pressure coming from VC’s or your private life haunting you with the lures of getting a “real job”, your team, driven by a mission and an honest corporate culture, will support you to keep pushing if you haven’t reached critical height or potential.
Essence: At the end of the day you have to believe in what you’re doing. VC’s might steer you away from the riskier decisions or going international. Keep a handle on your own parachute, you and your team hold the rip cord on your destiny.
You may have noticed a common thread across our interviews when we ask the opening question of mistakes Swiss entrepreneurs tend to make, the answer is almost always rooted in trust.
This time we are talking about self-trust and believing in your product and the market against any looming risks. Selling too early and thinking small, are traps which are easy to fall into when in the geographically small Switzerland or Europe. Consider the following trap and alternate approach…
You’re running out of money, the option to sell comes up and is tempting you to a more comfortable outcome.
Be up front with your team, discuss salary cuts and repayment plans. Harness team culture against obstacles – you acknowledge that you need to be able to take hits to later take victories and you decide to fight for every customer like life and death.
Essence: If you’re looking for romance, you usually never find it. You can’t force an exit in the same way. Focus on thriving, love what you’re doing, be good at it and if you’re successful with your direction things will happen on their own.
Being focused on the target means knowing the trajectory and all the possible outcomes well enough that you’re able to say no to yes. Of course you run the risk of saying no in the wrong moment but our general tendency as humans is to say yes too early or too often.
Should you jump?
First, check your original manifesto and the potential of the product. Have you reached the heights you believed in since the outset?
Second, look to your team. What are their needs and vision? How might selling and who you sell to affect the company? Sometimes the larger the offer the less that’s left of the company and much like you would in your quest for finding fitting VC’s, patiently doing your diligence is integral to both team and product.
Finally, double check your equipment and resources available to you. Resources can mean cash, VC’s on board or even an untapped market.
Taking time to make informed decisions rather than impulsive ones not only helps you make decisions when the time comes but also to have no regrets once you’ve made them.
Aim high, and you won’t shoot your foot off.
More from Swisspreneur blog series on exits.
Why Malcolm Gladwell’s 10,000 hour rule isn’t always right.
Forbes on, why you keep saying yes.
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