The perennial question facing the industry is ‘when to exit?’ It is a question front of mind for Founders, Investors, executive team boards, even passive stakeholders, mainly because a concrete answer is, and has been, so far out of reach. There are of course a multitude of factors that will determine when to exit and these themselves change as the market and the world changes. The global financial crisis, digital transformations, emerging markets and the pandemic have all in their own way recalibrated the world of business over the last two decades, shifting the goalposts slightly of takeovers, IPOs, mergers and more. No wonder the question was one of the most requested topics for debate for our Business Leaders Meetup.
Thank you to our moderators, Anwen Cooper, Jay Patel, Jody Saunders and Osama Gaweesh, for your expert mediation and to the rest of the group to offered their thoughts and insights that helped to create the below:
“You either win or you learn”, the Meetup heard. Time and experience almost always offers the best insights on when to exit, although requires more patience than others. For those less willing to wait that long, mentors with experience in your sector and/or position can be invaluable in your decision making.
But a mentor with sector and region experience will work even better when complemented with your own. Understand the levers of the sector you operate in, historical exits from competitors or forebears, the main players and the likely hurdles on the horizon. Also consider the cultural and socio-political factors that may face your exit strategy; US-focused plans will have to account for a different spin than UK or Asian markets.
The best exit strategy is prepared at your business’ conception. Some Founders build a business to sell, others build a brand to foster, and recognizing early on where along the spectrum you fall allows you to work year on year to that goal.
4. Own self
Consider if or how your personal goals or context has changed. Some leaders said exit strategies can be brought forward, for example, if you would rather focus on philanthropic ventures. That’s fine, but, considering point 3, ensure your roadmap is adaptable for any of the unforeseen changes to your plans.
Rarely does the right buyer come at the right time at the right price, so prioritize in what order you need them. In many cases, the right buyer, although at an inopportune time and for a price tag short of expectations, can be the next best step for your company, its potential and your team(s).
Interestingly, the gut instinct was mentioned by a number of the debate groups as an unscientific, almost irrational, factor in decision making. Don’t rely on it, but don’t rule it out.
Middle-people are important. The right broker can make or break your exit strategy and here is not the place to save money.
Your networks are precious lakes of information, connections and gossip: use them, grow them and value them.