Mark Cuban on the Value of the Exit, Big and Small

Mark Cuban is the well-loved Dallas billionaire that millions of Americans welcome into their homes every Friday evening on the TV show Shark Tank, a show dedicated to offering funding to startups looking for capital. In a March 2014 blog, found here, Cuban takes a legitimate swipe at Silicon Valley where they are looking for the next big thing, using Hollywood as a fair comparison.

Calling it the Back to the Future arbitrate, Cuban writes, “Like Hollywood, today’s nouveau entrepreneurs are looking past the pitch right in front of them to the next source of capital who will pay a higher valuation.” Lamenting the fact that there are always bigger fish out there and Silicon Valley is always looking for the next bigger fish to invest in, he noted that really what Silicon Valley does better than capital in every other city is create exits.

Cuban strikes back at the Valley, telling his readers that if they want their new ecosystem to be able to play in the big leagues, they do not need to worry about capital to create companies. Instead, they need to “stress about capital that will provide exits for companies or that can get them to a liquidity creating IPO.”

Stressing the value of the exit, Cuban recognizes exits do not need to be worth a billion dollars in order to be worth it. This is certainly true in Dallas, where there have been big and small exits alike, from a $2.7-billion exit by ZS Pharma to AstraZeneca to the $130-million exit of Ustream to IBM. Small funding measures are also beneficial and abundant in Dallas: Bookshout raised $6 million, HipLogiq $5 million and RewardStyle $15 million.

These big and small exits, and the big and small raising of capital, are great for the city and attract new entrepreneurs to those offering funding. With 23 billionaires in the Dallas/Fort Worth area, more than 10% of the worlds 1,826 billionaires, there are plenty of opportunities for capital to be raised and money to be made.

Mark Cuban’s original blog posted in March 2014 can be found here.

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