Building Company Playbook #7: Planning and executing your exit strategy
This entry will focus on exit strategy, from M&A to IPO, and the required factors for success
Hi Fintech Architects —
Today we are continuing our Building Company Playbook series, targeted at addressing the key questions in getting Fintech and DeFi projects off the ground. This entry will focus on how an exit strategy is paramount to a venture's success, dictating not only its endgame but also influencing operational and strategic decisions along the way. Understanding various exit options, such as secondaries, M&As, and IPOs, and employing tactics to negotiate a profitable deal, can equip a fintech company to maximize its value and ensure a successful transition.
For prior series, here are the guides so far:
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The Way to Exit
The world is chaos.
Maybe we just float along the water, hoping for the best. The tide will bring us in and out with market cycles. Some boats are faster than others, and perhaps we reach the shore and bask in the sun, eating the ripe fruit of paradise.
Or you know, maybe we make a plan. We construct the engine, program the software, and make the rules according to which our life will move forward. Our steamboat contraption is armed and ready to conquer that island, to harvest its fruit, to fill our hungry bellies. We will rage against the metal doors of the labyrinth, until it is conquered by our machinery.
While it can be appealing to let go of fate and hope that random chance leads to your successful exit, the reality is harsh. The chance of success is low, and the odds are stacked against you. Further, venture investors will generally want you to stick it out as long as possible given the dynamics of their portfolios — only big wins count. So you may need to ignore their advice. As an entrepreneur, monetizing your equity at any stage could be a life-changing decision.
Here are some statistics for context: