Is This Your Situation: Forging an Exit Plan for Your Tech Startup

It is common in the industry for smaller tech companies to be purchased by larger ones. This can lead to big payouts for the original owners and long-term success for the brand. While you may not start your company with the intention of being purchased, it is important to have all of your ducks in a row throughout the process. Are you prepared for the eventual exit from your company? Let’s look at the reasons why you need to have a system in place.

Do you have the right management team in place? There are a variety of ways a company can transition after a buyout. And having the right management team in place can help with that transition. Is your staff ready for this big change?

Are your systems and processes documented?When a small tech company is purchased by a larger one, the new owners may make procedural changes to conform to their corporate culture. But they need a blueprint to start, so having documentation is critical.

How do your books hold up? Regardless of whether you plan to sell, having messy books is never a benefit for your business. Keep your expenses in line and your taxes correct so you can have an easy transition when the time comes.

What are your physical assets? Yes, your company is desirable for your collective knowledge and products, but there is also value in what you physically own. Do you know what that value is? And how can you transfer the ownership?

Do you have an advisory board? Making this kind of transition can be challenging, so surround yourself with others who can help you through the process. Creating an advisory board made up of trusted people in your circle can help you think through ideas and processes along the way.

Is your company valued? How do you know whether the buyout is fair? Have you gone through a formal process to determine the value of your company? Even if you don’t expect to sell right away, this is a good experience to have so you know what to expect when you’re ready.

These are all just first steps in the process of ensuring that you have the right exit strategy for your tech business. There are dozens of things to consider to ensure the shift is smooth, your reputation remains intact and your company is successful in the future. You don’t have to do it alone. Contact us to find out how we can help you today!