Exactly what is “Founder Exit Strategy”? Long ago, I discovered that being successful meant always planning all activities with a focus on what the entrepreneur plans to do with the business in the end. Does he want to take it public? Is she planning on a short exit through selling the organization? Do they plan to bequeath the business to their heirs? This is what I call founder exit strategy. If you have a founder and investors, their exit strategies need to be aligned or at least compatible, in order for the exit to be successful.

Each department should be responsible for their part of meeting that goal. HR should work closely with Marketing to share resources, cross-team, to strategize on what activities can be done to achieve the exit strategy. Let’s say the plan is to go IPO. Are there external funders or other stakeholders that need to be advised? Will the company need their counsel to achieve their goal? If so, what VCs or other funding resources do we want to attract? What messaging will attract these VCs? What sort of personnel will be required and how do we want to attract them?

Brainstorm ideas, prioritize those to focus on the short-term, new initiatives to test as resources become available, and develop a complete plan that addresses the needs of all stakeholders. You may also want to transform the work environment to facilitate the implementation of the plan. Team growth or downsizing may require changes to the floorplan configuration for more conference and meeting spaces, or an expanded space for R&D, training venues, modernization, for example. Marketing can work to ensure that the space conveys the same attributes which align with company branding and messaging. For example, you can’t have an internet company in an office that looks like a bank. Dress codes are different as well. Leaders in the organization should empower HR policy makers to add word-of-mouth benefits, like being a pet-friendly office, or “ties not allowed”, or 24-hour massage center – something interesting that becomes a potential conversation starter or a mnemonic.

All departments should understand the end game because if your financial team is focused on long term investments like hedging currency exchanges while your business development team is looking for free short term partnerships that look good on paper (for example, I’ve seen pitches where the presenter said “we have four out of the five telcos as our customers”, which meant “we give three of the biggest telcos everything for free and the fourth pays bottom dollar”) to impress new investors.

This doesn’t mean that the exit strategy can’t change. In fact, it most likely will. At one company I worked with, the CEO was constantly stating that his goal was to have 10,000 employees by 2025. I did the math as the CSO and showed how we could actually do it. Having 10,000 employees with 70% of them on a monthly retainer would make us the largest firm in our industry, but that industry was changing. While watching industry trends, we saw automation like AI and other technologies rapidly changing that business model, so we had to come up with new ways to drive revenue and that would mean testing new business models, expanding into new markets, creating strategic alliances, and creating innovative new ways to secure new clients, create new services, and build new revenue. While that goal still sits on the wall in that office, the new exit strategy is still to create the largest firm in our industry, but it will be measured differently. How they plan to measure that? Number of clients? Industry sectors? Countries? Revenue? That is still in the works.

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