Is it better to sell your AI startup early for a good outcome or hold on for a great one? I'll explore the complex financial and emotional calculus behind the decision to sell, and the questions every founder must ask themselves.
What I've Learned From 128 Companies
Across 234 angel investments, including Anthropic, a few patterns in AI startup exits come up again and again.
The founders who handle AI startup exits well understand that the market doesn't care about your roadmap.
Why Most Approaches Fail
Many common approaches to AI startup exits are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
What I Tell Founders
Before deciding anything about AI startup exits, start with three questions:
What's your timeline? Because the right approach for a company with 6 months of runway is very different from one with 3 years.
What have you already tried? Most founders have tried something. Understanding what didn't work is often more valuable than knowing what might.
Who on your team owns this? If the answer is "everyone" or "no one," that's your first problem to solve.
These questions seem simple but they reveal a lot about where a company actually stands.
This connects to broader themes around AI talent wars, AI pitch decks, AI market sizing, AI exit strategies 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 AI startup exits 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 AI startup exits 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'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 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: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.