On August 17, 2022, PCCI, PYEA, and Round One held the final leg five-part webinar series, “The Bull’s Eye: Building Generational Wealth.” Part five answered questions related to investment exits such as (1) the different ways to strategically exit investments, (2) factors or metrics an investor should take note of in cashing out an investment and (3) how investors can mitigate the risks associated with cashing out.

 

The webinar’s main speaker, Mr. Franco Varona of Foxmont talked on investing in digitalization and investment exits.

 

“Cashing in on your investment ultimately relies on one thing first: making the right investment”, Franco said. According to Franco, Foxmont believes that the Philippine’s burgeoning tech ecosystem is the next big investment opportunity.  The rise of e-commerce and the need for logistics networks and digital services provide investors with new opportunities. The key to managing your portfolio, he emphasized, is knowing when to take your chips off the table.  Franco stated that early-stage investors and venture capitalists (VCs) need to know that they need to look for exits before the company can make an Initial Public Offering (IPO).  Franco added that as startups themselves grow and need to get access to larger international investors, the natural exit for ESIs and VCs (and also angel investors) is to sell secondary shares to larger funds.

 

In the panel discussion portion, Mr. Varona, Mr. Ivan Lew of Shaw Invest Holdings Singapore and Mr. Juancho Jimenez of Openspace answered questions that tackled their personal experiences on exiting investments.

 

When asked how to decide when to sell shares as an investor or maintain the best interest of the business, Lew said it is important to have a plan and a timeline in order to return money to stakeholders. For Jimenez, before underwriting an investment, venture capitalists (VCs) must match the constraints put upon them—when do they have to exit and can they actually realize the return within that timeline, based on the business that they are investing in.

 

Jimenez’s advice for institutional investors is to come up with a thesis in order to easily analyze possible lapses.  On the other hand, Law advised to build your company according to your exit strategy, then you will know how to monetize it.

 

In preparing for portfolio companies to IPO, both Jimenez and Varona instructed to not do it alone.  However, Lew explained that there are somethings you have to do yourself like accounting, understanding the market, and knowing your fit in the market.

 

At the end of the webinar, Jimenez said, “It’s all about balancing all of the requirements of your stakeholders and understanding each of those before deciding to exit or not. If you’re an entrepreneur, always put an exit in mind and align it with your personal goals. Some will be happy without an exit, but you’ll need to have the right people on board who will be happy to support that”. --- Athena Danielle Quizon

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