It’s recommended for all start-ups should have an exit plan even if they’re not even thinking about it…
Why…
It is important for start-ups to have an exit plan because it helps to provide a clear roadmap for the future of the business. An exit plan can help the company’s founders and investors to understand how they will achieve their long-term goals, whether that involves selling the company to a larger firm, going public through an initial public offering (IPO), or achieving some other outcome.
Having an exit plan can also help to attract potential investors, as it shows that the company has a clear vision for its future and is not simply focused on short-term gains. Additionally, having an exit plan can help the company to prepare for and navigate any challenges or changes that may arise in the market, as it provides a framework for making strategic decisions.
- Planning for the future: An exit plan helps a start-up anticipate and plan for the future, whether that means preparing for the possibility of being acquired by another company, going public, or simply winding down operations.
- Protecting the business: An exit plan can help protect the business and its stakeholders, such as founders, investors, and employees, by ensuring that there is a clear plan in place for what will happen to the business in the event that the founders decide to move on or the company is no longer viable.
- Maximizing value: An exit plan can help a start-up maximize the value of the business by considering all potential exit options and choosing the one that will best achieve the goals of the founders and investors.
- Reducing risk: Having an exit plan in place can help reduce risk by providing a clear roadmap for how the business will be transitioned to new ownership or shut down in an orderly manner.
An exit plan is an important tool for any start-up to have in its toolkit as it helps the company anticipate and plan for the future, protect the business and its stakeholders, maximize value, and reduce risk.
The following two links from Crunchbase & TechCrunch provides a high-level overview on when startups have exited…
What every startup founder should know about exits | TechCrunch
How Long Does It Take a Startup to Exit? – Crunchbase