Dear SaaStr: From An Investor’s Perspective, What is a “Good” Exit Strategy/Plan for a SaaS Company That’s Raising a Seed Round?
Ok, people are going to tell you not to have a slide or discussion on an “exit strategy” and they are right.
An “exit strategy” slide in a VC pitch deck makes you look like someone not going for it, not really. It really does. If you have an Exit Strategy slide talking about a $50m, $100m exit, there’s > a 95% chance I don’t even want to meet.
But …
You still sort of want to do this. Just more subtly.
Because unless you have a very experienced investor in your vertical, in your space — and sometimes, yes you will — they may need help. To see it all.
- They’ll need help to see why this can be a Unicorn.
- They’ll need help to see why you are really changing the world.
- They’ll need help to see why your crappy little buggy software that barely does anything will be trusted by the Fortune 100.
- They’ll need help seeing how you can ever get to $50m, $100m, $300m ARR. More on this here: SaaStr | Is $300m ARR the New $100m?
and really …
They’ll need help seeing if their investment will ever be worth anything outside of an IPO.
So don’t have an “exit strategy” slide. That’s usually a mistake.
But have a “competitive and cooperative landscape” slide that includes everyone with a valuation > $1 billion or so that could buy you, someday, maybe. Do more than just put your 2 little competitors today on this slide. Include the big guys and non-obvious candidates that not just could become competitors down the road … but could also acquire you for big bucks. Especially non-obvious big guys that only make sense once you understand the space.
That will help.
A related post here:
