Selling Your Startup

4How to Plan Ahead

Although you've already learned that entrepreneurship requires a lot of flexibility and long-range planning, you also know the pains associated with failing to plan and looking far enough into the future.

You may never plan to sell your company. Or maybe you've had your eyes set on an IPO. Yet, if you build a great company, then it's likely an M&A deal will come looking for you. It may prove to be the best exit for many reasons.

If you build your business in a way that sets it up for an attractive acquisition, you'll also be building a strong company that will have great long-term potential as a private business or that is poised for an IPO or further fundraising. Having a merger or acquisition as a possible exit strategy will give you the most flexibility and strength for several possible outcomes.

Most startups don't think far enough ahead to position themselves for an M&A exit. When it does become an option (or a necessity), that lack of planning is going to take a big bite out of the price tag. Inadequate planning means inferior terms in a sale. The whole process will be a whole lot more intensive and stressful.

Think of it like returning a leased Maserati. If you ensured proper maintenance, kept it in pristine condition, washed it, did oil changes on schedule, put in the right gas, avoided any damage, and didn't exceed your miles, then on returning it, the dealership would be more than happy to upgrade you to something even better. Perhaps with just ...