The Lesser Known Advantages of Modest Exits

In the entrepreneurial world, the term 'unicorn' is often brandished like a badge of ultimate success, implying that unless you've founded a company valued at over $1 billion, you haven't truly "made it." I think this narrative is misleading and stifling for many founders with successful, albeit smaller, exits.

As a multiple-exited founder, I want to debunk the myth that every startup needs to aim for an exit in the hundreds of millions of dollars. Instead, let's discuss the life-changing potential of smaller exits—ones that can give you as a founder or co-founder at least $5 million. I'll also explain why it’s generally easier and perhaps wiser to build and sell one or two companies that yield these numbers rather than pursuing a unicorn status.

The Life-Changing Impact of a "Smaller" Exit

Financial Freedom

Firstly, let's put things into perspective. An exit that leaves you with $5 million or more is a staggering amount of money. It's enough to give you a level of financial freedom that most people can only dream of. You're set for life, with the option to invest, travel, and afford luxuries, without the constant worry about your next payday.

Time and Flexibility

Secondly, a smaller exit allows you the gift of time. Without the colossal responsibilities that come with running a unicorn, you can choose to focus on things that genuinely matter to you—be it another startup, philanthropy, or even a sabbatical.

The Easier Path to Success

Reduced Risk

Chasing a unicorn often demands exponential growth, and with it comes exponential risk. The harsh truth is the majority of startups fail. In contrast, a business that targets a more modest exit is more likely to succeed due to less complicated operations and a more focused market strategy.

Fundraising Realities

Raising capital for a unicorn often involves multiple funding rounds, and each round dilutes your ownership. You'll likely end up with a smaller percentage of a large pie, less influence and the relentless pressure to meet investors' sky-high expectations.

Funding a Unicorn: A Double-Edged Sword

Complexity and Dilution

As I mentioned, funding a unicorn usually involves multiple rounds of venture capital, each with its own terms and conditions. This adds layers of complexity and, more often than not, results in diluting your stake in your own company.

Increased Responsibilities

With great power comes great responsibility, and these responsibilities can be crushing in the case of unicorns. You have to answer to a larger number of stakeholders, manage a rapidly growing team, and stay ahead in an aggressively competitive market.

Entrepreneurship is not a one-size-fits-all journey. While there’s undeniable allure in building a unicorn, it’s perfectly acceptable, and often smarter, to aim for a smaller, more manageable exit. Ask yourself the question. "Just how much is ENOUGH money". An exit of $5 million or more can be life-changing in ways that offer you financial freedom and the autonomy to dictate your future endeavours. Sometimes, smaller exits can indeed be the bigger wins.

#StartupExit #Entrepreneurship #BusinessGrowth #VentureCapital #FinancialFreedom