Sitemaps
Let's Get Back to Our Why
Does Startup Success Validate Us Personally?
How We Secretly Lose Control of Our Startups
Should Kids Follow in Our Founder Footsteps?
The Evolution of Entry Level Workers
Assume Everyone Will Leave in Year One
Stop Listening to Investors
Was Mortgaging My Life Worth it?
What's My Startup Worth in an Acquisition?
When Our Ambition is Our Enemy
Are Startups in a "Silent Recession"?
The 5 Types of Startup Funding
What Is Startup Funding?
Do Founders Deserve Their Profit?
Michelle Glauser on Diversity and Inclusion
The Utter STUPIDITY of "Risking it All"
Committees Are Where Progress Goes to Die
More Money (Really Means) More Problems
Why Most Founders Don't Get Rich
Investors will be Obsolete
Why is a Founder so Hard to Replace?
We Can't Grow by Saying "No"
Do People Really Want Me to Succeed?
Is the Problem the Player or the Coach?
Will Investors Bail Me Out?
The Value of Actually Getting Paid
Why do Founders Suck at Asking for Help?
Wait a Minute before Giving Away Equity
You Only Think You Work Hard
SMALL is the New Big — Embracing Efficiency in the Age of AI
The 9 Best Growth Agencies for Startups
This is BOOTSTRAPPED — 3 Strategies to Build Your Startup Without Funding
Never Share Your Net Worth
A Steady Hand in the Middle of the Storm
Risk it All vs Steady Paycheck
How About a Startup that Just Makes Money?
How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
My Competitor Got Funded — Am I Screwed?
The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
Why do VCs Keep Giving Failed Founders Money?
$10K Per Month isn't Just Revenue — It's Life Support
The Ridiculous Spectrum of Investor Feedback
Startup CEOs Aren't Really CEOs
Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
All Founders are Beloved In Good Times
Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
What If my plan for retirement is "never retire"?
Startup Failure is just One Chapter in Founder Life
6 Similarities between Startup Founders and Pro Athletes
All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
Living the Founder Legend Isn't so Fun
Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
How Many Deaths Can a Startup Survive?
This is Probably Your Last Success
Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency

Why Having an Exit Strategy Doesn’t Mean I Want to Sell My Business

Jason Eckenroth

Why Having an Exit Strategy Doesn’t Mean I Want to Sell My Business

As a bootstrapper, I had a complicated relationship with the topic of acquisitions. I rejected the idea that an Exit Strategy was an important part of running a great business.

First, I believe that entrepreneurs are conditioned by our media, society, peers and their investors (if they have them), to think that selling their business is the ultimate manifestation of success.

Now that I have experienced the arc of scaling a profitable business and achieving a positive cash exit, I see the alternatives to selling more clearly.

On the one hand, I have appreciation for the commitment and vision it takes to turn down a lucrative, flattering, possibly life-changing offer in exchange for continuing to roll the dice and play the game.

On the other hand, I’ve since met several founders who turned down good offers, only to see their business decline to a shadow of itself a few years later.

There is no guarantee that if I had held onto my company, we would have continued to experience our success unabated. However, as one of my VC friends (quite versed in acquisitions) told me as I was considering my options,

“Jason, if you decide not to accept this offer, you are not negotiating for a better deal, you are deciding not to sell. That means you are deciding to put your head down and continue to build the business good or bad. This is a 5 year decision.”

In other words, the alternative to selling a successful business, is a commitment to a continued evolution, iteration, and reinvention.

Investors like to ask funded entrepreneurs, “What’s your exit strategy?” It makes sense that an investor wants to know if the person they’re giving money to has an idea of how they will get it back (plus some!).

In my experience building ShipCompliant, I felt having an answer to that question drew me away from the long term. I also believed that the existence of an “Exit Strategy” didn’t align with the fundamentals that form the foundation of great businesses.

Screen Shot 2017-03-21 at 1.22.00 PM

I believed that I should focus on building a GREAT (culture / customers), PROFITABLE (sustainable), and DURABLE (recurring revenue, low attrition, deep competitive moats) business. If I was planning today, in order to sell later, it would have lead me to make short term decisions with negative long term affects; for example, raising prices on current customers and ignoring their support issues and feature requests, or taking my eye off of New Logo growth in pursuit of extracting more revenue from my current crop of customers, or worst of all, making exceptions to our hiring standards in order to “move faster”.

For this reason, I decided bootstrapped businesses shouldn’t have an “Exit Strategy” if they desired to build a GREAT, PROFITABLE and DURABLE company.

I was wrong.

I had confused an Exit Strategy with “how will you sell your company”. When in fact, an Exit Strategy is more a vehicle for determining a long term vision for what one wanted out of their business. What do I want my ideal life to look like 10, 20, 30 years in the future? How can my business best serve that vision? Is my Exit Strategy to fully cash out and leave? Or is it to eventually see my fledgling business become a holding company of several businesses across many industries? Is it to see my role diminish, but ownership stake stay constant? Is it to take enough capital off the table to become debt-free and cover kids college? An Exit Strategy can inform an infinite number of possible paths.

Today, now that I have sold my company, and left the business, the suggestion I give other entrepreneurs in this position is to answer the question, “What do I want my ideal life to look like 10, 20, 30 years in the future?” and document it during a time of relative calm and unimportance.

At ShipCompliant, after 12 years, and a lot of ups and downs, my team and I were successful in building a “great, profitable, and durable” business. Loe and behold, I started receiving unsolicited acquisition offers — eventually reaching multiple parties and meaningful multiples, that I started to take the idea seriously.

Without my Exit Strategy thought through and written down, I found myself reacting to the offers, reacting to the option of selling or keeping the business for the long haul. My time, gut, and brain were consumed with questions like “Who is the better partner?”, “What are the right terms”, “How do we keep the business performing during this process?”. Those are BIG questions. Once I layered on, “What do I want in my life?”, “How can this best serve my family and those I care about?”, “What will I do next?”, “What actually matters most to me professionally?” — it became a big, stressful mess.

Alternatively, if I had been clear in my personal vision and how I saw my business best serving that long-term vision, there would have been a quick, painless, binary decision on whether to take the second meeting with the acquirer in the first place.

My advice to myself:

Create the Exit Strategy by 1) Thinking through and capturing your long term personal vision. And 2) Once a year, review how your business is best serving that personal vision.

Knowing what you are going to do next, after selling, is the number one precondition to having a happy exit, as noted in Bo Burlingame’s recent book, Finish Big.


Also shared on the Startups.co Medium Publication

Find this article helpful?

This is just a small sample! Register to unlock our in-depth courses, hundreds of video courses, and a library of playbooks and articles to grow your startup fast. Let us Let us show you!

Submission confirms agreement to our Terms of Service and Privacy Policy.

Already a member? Login

No comments yet.

Start a Membership to join the discussion.

Already a member? Login

Create Free Account