As Angel investors we all want the ‘A’ team managing our portfolio companies, but we rarely expect to find one. What we tend to do is supplement the existing team with people with experience so that we have a reasonable chance of growing the business and avoiding the basic mistakes. We want to see a team with good leadership, strong marketing and operations experience and good networking skills. But aren’t we simply assuming that there is one size fits all and that building revenue and profit is the only game in town.

I have been in number of investor meetings recently where the intention was to build up the team to create a business which had a reasonable chance of meeting higher revenue targets. However, when the discussion has come around to positioning the business for an exit, a completely new set of requirements have been identified with dramatically different timescales. The question of who should undertake the exit strategy activities is a very different one from who could grow the business.

Once you focus on the exit, the set of tasks to be undertaken to prepare the business for, say, a trade sale are often very obvious and some will be of a specialist nature such as IP, legal and deal negotiation. Also you may find that instead of building up a sales and marketing force and establishing a customer base, you only need a couple of good customer sties as proof of concept. Instead of growing the business to 10, 20 or 100 people, you might just need a small team to complete a limited set of development and proof of concept tasks.

While the founder/entrepreneur might not have the leadership skills to grow the business, he or she might be just right for building relationships to the prospective buyers. Alternatively, you might task the entrepreneur with getting the trial sites working and employ an experienced M&A corporate executive to set up relationships with prospective buyers and negotiate the final deal.

What is obvious from the many investor meeting I’ve attended is that they have failed to work back from the exit to establish what needs to be done and who should do it. If the only business model you have in your head is revenue growth, you will always end up with a growth oriented team. If, however, you have a strategic exit in mind, the nature of the tasks to be undertaken are likely to be very different and it will call for a different mix of people. What you will also find is that the existing team you have is more than capable of participating in the exit strategy.

Strategic exits are much less demanding on resources, tend to have shorter execution times, lower operational risks and higher investment returns. What is also obvious is that it needs a different set of skills from a conventional growth oriented business strategy. Before you commit to hiring anyone, take the time to set out your exit strategy and then see how you would use the existing staff and what additional skills you will need to execute the exit deal.