I think there are two different phases you’ll go through, and your exit strategy should evolve.
Phase Early: You Can Be Killed. This is probably up until $8m-$10m ARR in SaaS, although it can vary.
- Here, you might not be able to raise another round.
- Or continue to build a competitive enough product.
- Or get disrupted by a partner or someone else.
- Or keep up with customer needs.
At this phase, as CEO, you have to come up with options to keep the company going. This is one reason why being Chief Fundraising can be Job #1 for many CEOs.
Another way to make it happen is to find a “landing spot” via acquisition.
How do you do this? You meet all the VPs and CEOs that could acquire you. It really is that simple. If they know you and trust you, then, if they have interest in acquiring you … it’s much easier.
But then eventually, things change. You get to …
Phase Inevitable. You Can’t Be Killed. You may not be growing as fast as Slack or Zoom. But at $10m+, $20m+ ARR, if you have happy customers and net negative churn … you can’t be killed. Not by VCs. Not by competition. Not by a BigCo entering the space. You have too strong a brand and market position.
At this phase, I’d argue maybe … don’t worry about an exit strategy anymore.
At this phase, it will hold you back. Optionality will keep you from finding your full potential.
Also, once you have a brand, the acquirers will find you. As will Private Equity firms.
Once you are unstoppable, put the exit strategy behind you. And settle in and go long.