To Exit Plan or Not?

TO EXIT PLAN OR NOT? ABSOLUTELY YES, IT’S NOT EVEN A QUESTION

I get it. Running a business is brutally hard. It’s late nights, infinite decisions to make and unforeseen problems that usually leave little — to no — time for long-term planning. But I’m here to tell you that you need to force yourself to make time for Annual Exit Planning™.

If you’re a SaaS founder, think of your exit plan as a strategic roadmap for the future – one that ensures your business is mapped out with a clear destination in mind. The execution of your plan could be miles down the road, but don’t ignore these markers that the time to plan is now.

1. You’ve hit the two-year mark. You don’t have to be ready to sell to plan your exit. In fact, there’s no set timeline. We do, however, believe that a great business to sell is also a great business to own. So, why wait to get your company “ready to sell”? We know it’s all scaling, survival and sustainability the first two years in business. But once you’ve reached that two-year summit, mapping out your exit is the next logical step.

2. You’re riding the momentum. You’ve done the work, climbed the mountain and are now riding the momentum. You may want to hold on a little longer, but this may be the perfect time to ride off into the sunset. You want to benefit from a surge, not ride it out and wait for it to subside. So, if momentum is on your side, do yourself a favor and consider selling before reaching the peak.

3. Your passion has waned. Running a SaaS business is no easy feat, often leaving founders burnt out. Now, we aren’t saying you need to sustain a high level of excitement throughout your entire business journey. Feelings ebb and flow. But if dread and exhaustion have set in, it’s time to pump the brakes. Forging ahead could wear you down even more. Don’t let a declining passion let your leadership slip. Your team and business deserve better. Think of selling as a fresh start.

4. Your vision has changed. It’s natural for differences to surface in even the most united business partnerships. Most can be overcome, but one major disagreement can’t be avoided: Being at odds over a company’s future. A situation where one partner wants to sell and another doesn’t can damage an otherwise strong partnership and business. This doesn’t have to be your path forward. If you find yourself in such a conflict, it could be a clear sign that it’s time to make an exit.

5. Your life has shifted. Life has a way of throwing surprises at us. Lean into the changes. See where they take you. Maybe you want to take a step back to enjoy more time with your family. Or you want to slow down, travel or embark on a new journey. Whatever the reason, if life is pulling you away from your business, it could be the perfect opportunity to step away.

As a SaaS founder, have you seen any, or all of these, of these markers? If so, you know what we’re going to say: now’s the time to consider your exit plan. You don’t have to be ready for your next venture just yet, but getting a head start on the process will not only benefit your business in the near-term, but will also position your company for success when you are ready to make your next move.

MEET THE BAND

Chloe Ginkel - Acquisition Analyst, Summer Associate

Tell us a little bit about your background. Where do you go to school, what are you studying, etc?

I am currently in my senior year at the University of St. Thomas in St. Paul, graduating this December with a degree in entrepreneurship. Being a part of the Schulze program at my school has been incredibly empowering and transformative, handing me countless opportunities. I have been able to build multiple business concepts and pitch nationally, collaborate with local entrepreneurs and VC firms, lead on my school's Undergraduate Business Council, and so much more. What has impacted me the most has been my incredible relationship with professors who are highly connected into the entrepreneurial ecosystem in the Twin Cities.

What initially attracted you to the field of software and technology, and what motivated you to pursue an internship in this industry?

What initially drew me to the field of software and technology was a personal project I took on my sophomore year of college where I was able to conceptualize a business model for a mental health app targeting college students. I had the ability to pitch this concept through my university and nationally at University of San Diego, gaining invaluable insights from other student entrepreneurs and mentors. I quickly experienced how technology revolutionizes lives and fosters innovation. On the other hand I was able to see from another perspective how advancements in this field have leveled the playing field, empowering startups and transforming the entrepreneurial process.

As a summer associate, what are your main goals and expectations for your time at Big Band? How do you hope to contribute to the team and learn from the experience?

This summer my goal coming into the position was to be as curious as possible and to take every opportunity I could to learn. As I expected, I have been able to try on many different hats and be a part of countless diverse projects here at Big Band which has allowed me to acquire an incredible full-circle mindset toward the B2B SaaS industry. Every day presents challenges and experiences that are both familiar and completely new to me, and I am learning more than I ever thought possible!

Looking ahead, what are your long-term aspirations in the field of software and technology? Do you have any specific career goals or areas of specialization that you hope to pursue in the future?

In the near future, I hope to continue in the area of investment management/mergers and acquisitions. I am always open to exploring different fields but remain ecstatic to continue to build off of my learning within the software and technology industry. What fascinates me the most is the innovation and strategy possible to build off of established businesses and the opportunity to exercise my entrepreneurial passions. Big Band has allowed me to envision myself doing this each and every day, and I could not be more inspired!

THE PLAYLIST (What We're Watching, Reading, and Listening to)

• HoldCo Survey - HoldCoConf surveyed over 100 HoldCos of various sizes and industries. There are numerous fascinating benchmarks ranging from equity and debt use, holding period lengths, to staffing levels.

• How I Bought a Business Making $358k a year with no money down - The Secret CFO (always a great read!) provides a transparent look into a recent acquisition, paid for entirely by cash in the business and seller financing.

• Mock Features for B2B SaaS - Ab Advany walks through a brilliant technique he’s used to overcome the inevitable ‘new feature request’ that often is required to close enterprise deals.

UPCOMING IRL GIGS

• Kevin will be speaking at Main Street Summit in early November alongside an impressive lineup of investors and founders. This two-day event is a must attend for founders, operators, and investors alike.

JOIN THE BAND

We’re building our database with the best leaders and operators out there. If you know exceptionally talented people that may one day want to work with us, please have them get in touch with us at [email protected] or fill out the form on our Connect page.

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