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When investors ask your exit strategy but you know you are in it for the long-term (IPO), should you still reference being acquired?

The chances for an IPO are a long-shot, however, we don’t want to focus on short-term goals. We don’t want to turn investors away, especially when raising an angel round, but we also don’t want them to force our hand that winds up in a short-term win for them.

  • In terms of how you build your business it shouldn’t make a difference whether you’re looking for a quick exit or an IPO 10 years down the road. An IPO is a completely legitimate exit strategy. Investors check to see if you understand why they want an liquidity event at some point. Young founders sometimes have no exit strategy at all, and investors don’t like that.

    So you can just say that you want to build a business for the long term but that if the right offer comes around somewhere along the way you will of course consider it. Don’t lie to your investors about your intentions. If that means they pass then so be it.

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  • If you don’t want to focus on short term goals, then you may just want to bootstrap. Taking investor money inherently means you’re no longer in control of the medium or long term vision.

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      • agreed!

        Addition:

        – trust me u can not lie to (outstanding) IPO type investors.

        – things sometimes go wrong in ways u have never imagined

        – therefore, maybe not a good idea to pressure on IPO. u have plenty more ways u need to be worried about. has no weight.

        investor can find out what in ur mind is before they meet u.
        if you want to understand IPO, try to learn game theory.

        https://en.wikipedia.org/wiki/Game_theory
        Game theory is “the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.”
        also, if you have a question like that, that means you would 99% better off not to IPO. cuz, human makes irrational decisions after certain pressure. if u dont prepare u will give up. (ur questions signals to me u r not prepared).
        If u want to IPO, start to understand cap table in extreme detail, terms sheet. Stock goes to 33% investors, 33% co-founders, 33% employees. try to also estimate a break even.
        do not make decision based on what i wrote.
        just try to find patterns.
        if u understand the cap table, and u push something different forward, almost noone can mess with that. its high school math.

        bottom line,

        1- “DO NOT LIE AT ALL” => “YOU WILL IPO”

        2- “ALWAYS LIE” => “YOU WILL IPO”

        pick?

        – trust me u cant do the second.

        sorry if there is negative stuff i brought up. its the reality.

        good luck,

        Reply

  • There are investors who are looking for short term liquidity, and investors who are looking to go long/big. In a best case scenario, you will find investors who have the same goals and timelines you do. If your interests aren’t aligned, it’ll be tough to make a great company as the investors become partners and shouldn’t be seen just as sources of money.

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