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Entries in Investors (1)


No Exit Strategy is Your Best Strategy

"What is your exit strategy?" is one of the top questions heard by an entrepreneur when pitching their business. When an investor puts cash into a startup company, their goal is to eventually get a big return on their investment. So investors obsess over their exit strategy. If they can't exit (pull their money out), then there is no opportunity to make a handsome return.

So it's understandable that an investor would want to focus on the exit strategy.

But that's the investor's problem, not yours! Your problem is to build an awesome company with insanely great products that you'd want to keep forever. You should never be planning your exit strategy before you have a fantastic company with great products.

Mark Zuckerberg didn't have an exit strategy in building Facebook. To this day he doesn't have an exit strategy and has resisted doing an IPO (taking the company public -- which is considered an exit strategy). Facebook, of course, is now worth over $50 billion and has rejected buy-out offers from Microsoft, Google and Yahoo. Additionally, Facebook investors have been quite happy and are able to easily exit their investments for a great return if they want to. However, don't use the Facebook example or you'll quickly hear "well, you ain't no Mark Zuckerberg and this ain't no Facebook."

Ughh, how short-sighted some investors can be.

Of course, not all investors think alike and your job is to find the ones that think like you, or that are compatible with you. Yes, the exit strategy is important for all investors, but the next time an investor asks "what is your exit strategy?" your best answer is to tell them "I have no exit strategy. I plan to build an awesome company that I'd want to keep forever -- a company that creates knock-your-socks-off products -- and if I'm successful at doing that, I'm sure there will be buyers lining up for every share of the company."

At AZ Disruptors, you won't have to worry about your exit strategy, but you will have to worry about creating great products! Learn More