Exiting your business

- As you build your business, make sure you're clear on whether it's a lifestyle business, or if you're looking to exit. Because it has huge implications for how you're going to fund it. If your business is built to exit, your investors will want to know how are you going to exit? Will it be by acquisition and who might buy your company? Will it be a sale just to other owners? Now, if you say we're going to do an IPO, it sounds a little bit silly. Especially in the early stages of running a business. So be practical about saying what your exit might be. If it's a lifestyle business, just understand that you'll get fewer people who are willing to invest in that. When you lay out your exit plan expect an ROI. Your investors will. What's the return on the investment that they're going to get? What's the timing they should expect it on? Your investors will want their money back and then some. I had a startup approach me at one point and they were seeking investment but it wasn't clear what the exit would be. They couldn't tell me what my return on investment might be. The investment was for all the right reasons. They were going to invest in sales and marketing and product development. They were looking to grow this business dramatically. But the answer I got was, "Well, we may exit or we may stay a lifestyle business, we're not really sure. It'll be up to the board of directors and we'll make that decision when we get there". Ultimately, I didn't invest in that because it wasn't clear if or how I would get my money back. Or get a return on that investment. So your business case needs to spell out, is it going to be a lifestyle business for you where you're not seeking external investment and you're just looking to build something to give you personal income. Or is it something where your investors can expect a return.