If you’ve made it past the early stage, chances are, your business is going to make it.
You’ve likely raised millions in capital, proven that your offer has market demand, got a great customer base and received offers to purchase your business.
It’s time to focus on growing your startup. To do that, you secure Series B and C investments.
A startup example in the growth stage: Alentis Therapeutics.
Founded in 2019, Alentis Therapeutics is a Swiss-French biotech startup developing novel therapeutics in cancer and liver disease.
In April 2023, the startup received $105 million in Series C funding from six companies, led by Jeito Capital.
How to master the growth stage and who can help.
More funding than before is essential to scale your business to a wider market and maintain long-term profitability.
Venture capitalist firms are still at the forefront of your growth-fueling funding. Investment banks, private equity firms and hedge funds might start to take interest in your company, too.
One major part of the growth stage is scaling your team. You need the right people in the right place.
Scaling a company is a highly strategic endeavor. Scaling up too quickly could mean burning through your resources faster than revenue comes in. If you scale too slowly, you risk not being able to supply growing demand or fail to meet deadlines.
As a founder, you can’t wear all the hats anymore. You have to lean on the right people, including startup mentors, to reach the next stage.
The next stage (and final stage for many founders), is the expansion stage. You’re already profitable and self-sufficient. Many people will no longer consider your business a startup. With the greater market in mind, your goal is to expand further.
A key indicator that you’re in the expansion stage is if you’ve managed to grow more than 20% annually for three consecutive years (in billing or employee count). At this point, your startup becomes a “scaleup,” according to the Scaleup Institute.
A startup example in the expansion stage: Acrotec.
Founded in 2013, Acrotec is an innovative group of companies based out of Develier, Switzerland. Acrotec’s Medtech division is one of the leading European Medtech subcontractors that primarily develops implants and instruments for spine surgery, extremities and maxillo-facial procedures as well as dental applications with implants.
In February 2023, Acrotec acquired its first U.S. company Axial Medical, a precision medtech manufacturer based in Warminster, Pennsylvania.
How to master the expansion stage and who can help.
In the expansion stage, you likely venture into the global market or expand by offering different products or services in other market segments.
You can also start considering acquisitions to accelerate expansion and take up a greater market share.
To tap into expansion, startup founders and executives typically seek outside counsel such as startup mentors and other founders who have gone through the expansion phase themselves. The further you go through each stage, the more you must rely on help, guidance and strategic partnerships to fuel business growth.
We’ve heard of the final startup stage many times before: “The Exit.”
This stage is optional and is oftentimes presented to founders naturally.
The foundation for a proper exit starts early: The values and assets you build will define the price of your venture. The relationships you foster will contribute to the trust that potential buyers have in you. Mastering “The Exit” depends on your goals. If the opportunity for an exit arises, the first critical decision is to determine whether you continue expanding your current business venture. It’s essential to assess the state of your startup and your own aspirations carefully.
There are three main ways to exit:
- Sell founder’s shares to another company
- Get acquired by another company
- Initial Public Offering (IPO)
A startup example in the exit stage: NBE-Therapeutics.
Founded in 20121997, the biotech company NBE-Therapeutics is engaged in developing antibody-drug conjugates (ADCs) and advancing targeted cancer therapies by using its immune stimulatory iADC platform.
In 2020, the Germany-based pharma company Boehringer Ingelheim acquired NBE-Therapeutics for $1.4 billion. Today, NBE-Therapeutics is a wholly owned subsidiary of Boehringer Ingelheim.
How to master the exit stage and who can help.
Successfully navigating “The Exit” stage requires planning and the right support. To master this stage, consider the following steps:
Define Your Exit Strategy: Start by outlining your goals and the outcomes you wish to achieve with your exit. Determine whether you want to sell founder’s shares, get acquired, or go public through an IPO. The choice should align with your long-term vision and the values your startup represents.
Build Valuable Relationships: Recognize that the groundwork for a successful exit is often laid well in advance. Cultivate valuable relationships in your industry and establish trust with potential buyers or investors. These connections can significantly impact the outcome of your exit.
Timing Is Key: Acknowledge that the timing of your exit is crucial. Market conditions and investor sentiment can significantly affect the success of your exit. Be aware that the current landscape may be more challenging for startups to secure favorable deals than it was in previous years.
Legal Support: Engage a team of experienced lawyers who specialize in mergers and acquisitions, IPOs or other relevant areas. Legal professionals can ensure that your exit proceeds smoothly, all regulatory requirements are met, and your interests are protected throughout the process.
”Startup mentors work closely with entrepreneurs to help them develop their ideas. They help to validate their business models, navigate challenges and make informed decisions.Adrian SprengerManager Entrepreneurship at Basel Area Business & Innovation