undefined | Better HN

0 pointsska4y ago0 comments

> I don't think elsewhere it's called an "exit strategy" to seek financing

I don't think that's how it is used in this context either.

A lot of early stage money in tech startups is there for the short(ish) term, and they definitely want to get their money out (i.e. "exit") at some point, not build a business over decades.

It's their usage of "exit", and the need to have a strategy for it, which drives the usage more broadly, I think. Agree it can be a bit confusing by confounding the above needs.

0 comments

dundarious4y ago

Right, it's the focus on "exit" also for founders (who also run the business) that puzzles me.

As for the "exit=financing" association, I made that based on your comment:

> > It's a jargon term not used in the entrepreneurial side of most other industries.

> That's because in most of the industries you are thinking of, you can get traditional financing.

> The need for an exit of some sort follows from the financial structure.

But I think I misunderstood and you were saying something more like that the lack of traditional financing leads to a form of financing that necessitates selling the business wholesale.

skaOP4y ago

> But I think I misunderstood

Yes I should have been clearer.

Re founders there is a tension: They often want to both maintain control (i.e. equity) and realize some $$ from building the company. A liquidity event of some sort is often seen as the best way to do this, especially if they've been lean on salary for a decade at that point, which is often the case.

j / k navigate · click thread line to collapse