Selling a business is a difficult task that requires a lot of planning and preparation. However, most entrepreneurs refuse to entertain the idea of a sale until it is too late. The best time to plan an exit is when times are good, not in a desperate situation. The longer the prep time, the higher chances of success. This article talks about how to build an exit strategy featuring Touraj Parang, President & COO of Serve Robotics.
"Companies don't do deals; people do. So it's good to get to know the people that do the deals." - Touraj Parang
Most startups don't survive after five years. 70% of venture-backed startups don't return the money invested in them. With horrible statistics on success probability, Touraj believes that entrepreneurs start ventures because they have a mission. They have an idea of what the future will look like and want to be a part of it.The best chance to achieve said mission is to be acquired by a larger company, and this is why entrepreneurs should build a business with an exit in mind.
An exit strategy also helps create a more sustainable business. Even if the company doesn't get sold, it is more likely to succeed and grow. Valuation also goes up if more acquirers are lining up for the business.
Building an exit strategy starts with the right mindset. Accept that planning early is in the company's best interest and that M&A is almost inevitable.
Selling a business is not a one-person task; having a team of experts will help ensure a successful exit with the right buyer. Here are the people needed for an exit strategy: