Smart founders prepare for both an IPO and an M&A simultaneously. I'll explain the 'dual-track' process, how it maximizes your leverage, and the key steps to prepare your AI company for both potential outcomes.
The Framework That Actually Works
Here is a simple framework for evaluating exit planning. It's not complicated, but it requires discipline.
Step 1: the data tells a different story than your gut
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: your team matters more than your technology
Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly
Nothing works perfectly the first time. The companies that get exit planning right treat it as an ongoing process, not a one-time project.
The Reality Nobody Talks About
A lot of the advice on exit planning rests on assumptions that made sense five years ago. The world has moved on.
The first thing to understand is that the best solutions are often the simplest ones. I've seen this play out across dozens of companies. The pattern is unmistakable.
Many teams spend months on the wrong path before realizing that the market doesn't care about your roadmap. Once they make the switch, everything changes.
Real Talk: What Actually Matters
Here is what actually matters in exit planning.
First, execution speed beats perfection. Every time. Companies rarely fail because they moved too fast on exit planning. Many fail because they moved too slowly.
Second, measure everything. If you can't measure it, you can't improve it. Set up tracking from day one, even if it's basic.
Third, talk to your users. It sounds obvious, but many founders make decisions about exit planning in a vacuum. Get out of the building. Talk to real people.
This connects to broader themes around AI exit strategies, AI startup pivots, AI talent wars, AI market sizing, AI due diligence that I've been thinking about a lot lately.
The Bottom Line
None of this is rocket science. But it does require intentionality, consistency, and a willingness to learn from mistakes.
If you take one thing from this article, let it be this: start now, start small, and iterate. The founders who win at exit planning aren't the ones with the best strategy on paper. They're the ones who execute, learn, and adapt faster than everyone else.
Companies that take exit planning seriously tend to pull ahead of the ones that don't.
If you're working on something interesting in this space, I'd love to hear about it. Drop me a line.
Frequently Asked Questions
Q:What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 234 startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Q:How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
Q:How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.