Tip #85: Exit strategy

Tip 85: Exit strategy – to include or not? On Guy Kawasaki’s 10/20/30 pitch infographic, he memorably concludes that “no entrepreneur knows when, how, or if she will achieve liquidity, and yet many include a slide that says “There are two liquidity options: an IPO or an acquisition.” Duh. If an investor asks about your exit strategy, it means he’s clueless. If you answer with these two options, you have a lot in common.

I guess we’re clueless: we are going to ask about your exit strategy. Yes, no-one knows when they will exit – but no-one knows what the financial projections will be either and you will definitely have to cover them.

Our goal as investors is to achieve a liquidation event – a sale of our shares to generate a return on our investment. It would be clueless for us not to at least think about this. In fact, it’s very often the first thing we think about, as it is for many VCs (including this guy).

So tip 85: include something on your exit strategy!