Cashing Out Successfully: Exit Strategies to Capture Value

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Cashing Out Successfully Exit Strategies to
Capture Value
MIT Enterprise Forum

• Presented by
• James E. Nicholson
• Chairman CEO
• Cortek, Inc.
• April 16 , 2001

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Outline

• Getting Ready
• Exit Strategies
• Evaluating a Company

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Setting the Stage for the Exit Starts Early

• An Enabling Technology
• Management Leadership
• Good counsel
• Financial Strength
• Technically Proven Product
• Having an Exit Strategy

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What is an enabling technology?

• Something that didnt exist before that allows
  you to do something you couldnt do.
• It solves a difficult problem quickly and
  elegantly.
• Unique product or service with a viable market.
• Provides an opportunity for substantial growth.

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Examples of Enabling Technologies

• Building the Colosseum

Built from 70 - 80 AD Structure needed greater
support Romans developed the formula for
cement Enabled construction of superior
structures (Formula was lost in 450 AD until the
Renaissance)
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Examples of Enabling Technologies
Putting the squeeze on clots The Venodyne Boot

• Non-invasive technology for DVT.
• In use for 30 years now.

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• Management Leadership
• Experienced CEO
• Seasoned Finance Person
• Marketing Expertise in Business Sector
• Innovative RD, Product Focus
• Regulatory Clinical Professional
• Good counsel
• Patent
• Corporate
• Regulatory
• Financial Strength
• Venture Capital - Staying Power

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Factors that Influence Success

• Technically Proven Product

For every vision, there is always an equal and
opposite revision.
Murphys Law 247
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First Have a technically proven product that
solves a real problem
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Then prove it . . .

• Statistical analysis with sound data
• Sales
• Professional papers
• Doctors acceptance
• FDA approval

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Factors that Influence Success

• An Exit Strategy

Almost everything in life is easier to get into
than out of.
Murphys Law 325
Corrollary A marriage license costs 2.00
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Want to be acquired?

• Sales
• Profitability
• Product with an enabling technology
• Strong fundamentals
• Strong management team

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Want to go public?

• Sales
• Profitability
• Product with an enabling technology
• Strong fundamentals
• Seasoned management team
• Timing is critical . . .

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PUBLIC EQUITY ISSUANCE FOR MEDICAL TECHNOLOGY
COMPANIES (as of April 5, 2002)
MEDICAL TECHNOLOGY EQUITY MARKET UPDATE
(Dollars in Millions)
Source Securities Data Corp. Notes Values
for disclosed transactions only. Labels
represent number of completed transactions.
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Evaluating a Company
Whether you are a start up company, a potential
investor, interested in MA, or an IPO . .
. you should consider the following checklist.
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?
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Thank You
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MEDICAL TECHNOLOGY EQUITY MARKET UPDATE
STOCK PRICE PERFORMANCE 4/05/01 - 4/05/02
Market Cap Weighted 4/05/01 100
Mid/Small Cap Med. Tech. Index (3)
All Med. Tech. Companies Index (1)
Large Cap Med. Tech. Index (2)
SP 500
Footnotes (1) Index Includes ABT, AKSY, AMMD,
ANSI, ARRO, ARTC, ASPM, BABY, BAX, BCR, BDX,
BMET, BOL, BSTE, BSX, CNMD, COO, CRY, CYBX, CYTC,
DJO, EW, GB, GDT, IMDC, IART, ISRG, MDT,
MTIX, NOVT, OCLR, OFIX, OTEC, POSS, RITA, RTIX,
SNCI, STJ, SYK, VASC, VMSI, WMGI. (2) Index
includes ABT, BAX, BCR, BDX, BMET, BSX, GDT,
MDT, STJ, SYK. (3) Index includes AKSY, AMMD,
ANSI, ARRO, ARTC, ASPM, BABY, BOL, BSTE, CNMD,
COO, CRY, CYBX, CYTC, DJO, EW, GB, IMDC, IART,
ISRG, MTIX, NOVT, OCLR, OFIX, OTEC, POSS,
RITA, RTIX, SNCI, VASC, VMSI, WMGI. Source
FactSet.