Exit is not a dirty word. Many founders assume that even thinking about exiting early on shows lack of belief in their vision. While founders should definitely be fully focused on building something useful that people are willing to pay for and generate profits for the company, it’s smart to have an exit strategy. This does not mean that your focus as a founder is on exiting the company you are trying to build into a unicorn, or that you should be focused on building something for someone else to buy. Having an exit strategy in place is important in the sense that things might not go as planned. It’s more of a prudent insurance plan that can make a big difference in the outcome of your startup and what you actually get out of it at the end, rather than an overarching strategy for the company.
When your startup’s runway is 6-12 months and you are starting to prepare for your next fundraise, that’s the perfect time to start also preparing to exit. Yes, it might sound crazy, but the fact is that you might not be able to fundraise. It’s a tough fundraising environment out there, and even normal times fundraising isn’t a walk in the park [imbed piece about when cutting cut deep]. If you don’t have a contingency plan in case you can’t fundraise, you’ll end up trying to salvage what’s left of your company at the last minute and likely end up shutting it down. The outcome for you and your stakeholders will certainly be much less favorable than if you had a contingency plan in place.
Any type of exit is infinitely better than shutting down. Aside from the fact that it might help repay some of your hard work, it’s a completely different narrative for your employees, customers, and investors. It can help keep your employees employed at a good company and have more options. It can provide continuity of service for your customers. It could give your investors another “exited” badge, one that you will also be able to wear and will greatly help with your next venture.
But existing is very hard and requires significant time investment and skills that most founders do not have. There is not much help out there for founders either. Investment banks and M&A advisory firms only work on deals worth at least 10s of millions, and brokers don’t do much aside from listing the business and that only works if the company is profitable. That’s where Voxhill steps in to help support you in achieving the best possible outcome.