• Economy -> Entrepreneurship and Startups

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Do all startups need an exit strategy to be successful?

Cuba Woodington

Well, I can't say for sure, but from what I've seen and heard, having an exit strategy is seen as pretty important in the startup world. Basically, an exit strategy is a plan for when and how the founders of a startup will sell their shares and move on to something else (or, hopefully, retire on a beach somewhere). There are a few reasons why this is seen as important.

First of all, investors usually want to know that they'll eventually be able to cash out and make a profit. If there's no clear exit plan, it might be harder to convince them to invest in the first place. Second, having an exit strategy can help keep everyone focused on the end goal. It can be easy to get caught up in the day-to-day details of running a company and lose sight of the bigger picture. Knowing that there's an eventual endpoint can help keep everyone on track.

That said, I'm sure there are plenty of successful startups out there that didn't have a clear exit strategy from the beginning. Maybe they were focused more on creating something they believed in, or maybe they just figured they'd cross that bridge when they got to it. I don't think having an exit strategy is necessarily a requirement for success, but it does seem to be a fairly common practice.

Personally, I don't know much about the nitty gritty of business and investing, so I can't really say whether having an exit strategy is always a good idea. I'm sure there are pros and cons to both sides, and ultimately it probably depends on the specific startup and the people running it. At the end of the day, though, my main concern would be whether the startup is doing something that I believe in and find valuable. If they are, then I'm not too worried about whether they have an exit strategy or not.