Why Founders Are Afraid to Talk About Exit Strategies

Acquisitions are a much more common end point for startups than IPOs. So why does no one talk about them? There are five common myths and biases that get in the way, and prevent founders from thinking ahead: optimism bias, present bias, signaling failures, the myth of entrepreneurial risk taking, and the myth of acquisition failures. Understanding these, and knowing how to work around them, can ensure founders have the broadest slate of possible options, and aren’t left scrambling when an acquisition deal is suddenly on the table.

For every IPO there are over 30 acquisitions each year. But while nearly all entrepreneurs and their board members know that an acquisition is the most common destiny of a successful startup, they rarely strategize about a potential sale. Instead, they only take exit planning seriously when their startup either desperately needs to sell or has inbound interest from an acquirer. As a result, they either miss out on significant…

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This article was written by Touraj Parang and originally published on hbr.org