Is an exit strategy a must for every startup company?

Kaustubh Katdare

Kaustubh Katdare

@thebigk • Oct 26, 2024

Do you think every startup must have an exit strategy - which mostly is acquisition by a bigger player interested in the domain or going for an IPO? That's how the investors and founders and key employees make a LOT of money. Every investor will ask 'What's your exit strategy' and whether the startup is building up products or services so that they will eventually get acquired by a bigger company.

Starting up with an exit strategy seems to be a popular trend among several startups. I think it's very rare to find a company that says we have no exit strategy and we're in the game for the lifetime and we want to build an organisation that will last for centuries.

What's your perspective on this?

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  • Anand Tamariya

    Anand Tamariya

    @anand-tamariya-DnfjEX • Dec 17, 2013

    If you talk to an MBA guy or if money is your motivator, exit strategy is a must. But then when you reflect on history, it's the crazy passionate people who built strong long-lasting businesses. Be it Wright brothers, Richard Branson or Thomas Edison. My take - as in everything else in life - follow your heart.

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  • Abhijit Dey

    Abhijit Dey

    @abhijit-dey-damdBv • Jan 29, 2014

    The exit strategy is important and needed when a startup is looking for investment and talking to investors. Either a buyout or going public.

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  • Sunil Singh

    Sunil Singh

    @sunil-singh-u35str • Feb 2, 2014

    My stance on this topic is that entrepreneurs most of the times (not always) are people who think out of the box. Any big or small organisation an entrepreneur starts with, I think he wishes that his idea should work really well (optimistic attitude). However, if it does not work (As every coin has got two faces) then what? in this case may be he might have to leave the market for sometime or in the worst case for rest of the time. So I feel that an exit plan is must and in today's scenario if an entrepreneur does not have an exit plan I would call him a jerk. Being an optimist and having a positive attitude is never wrong but neglecting the ground realities is also not right.

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  • Ankita Katdare

    Ankita Katdare

    @abrakadabra • Feb 3, 2014

    @#-Link-Snipped-# @#-Link-Snipped-# @#-Link-Snipped-# I would like to read your opinions on what exactly should be the exit strategy for a startup?

    Having one looks like a MUST HAVE from all your answers.
    What are the practical ways we can implement to have a reasonable exit strategy?

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  • Abhijit Dey

    Abhijit Dey

    @abhijit-dey-damdBv • Feb 3, 2014

    Not all startups are planned to last forever. Nowadays there are many startups which are dependent on another service for their company to function.

    For example, many companies come up which give analysis about data and managing databases, which are acquired by social networks and web hosting services.

    Exit strategies are usually needed so that the investors know right from the beginning how do you plan to go ahead with your company. It is also necessary so that you know what to do when your company maybe heading for a loss or the sales are low. At those times, an acquisition or going public becomes the right choice to bring back profit or keep the cash flow right.

    And it is really not that important to have an exit strategy right from the start. Before that one needs to understand how their startup is developing and where it is headed. And based on that, one must draw out an exit strategy.

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