If you care about your efforts to change the world, you should plan for exit now, regardless of your initiative’s stage. Not only will it boost your effectiveness and shore up your legacy, but it admits that you, your venture, or both will need an out. It is as inevitable as chicks leaving the nest, so we might as well plan for it! Sadly, considering exit seems to be an anathema. Let me help you shake that bias right off.
I have dedicated my life to launching and scaling transformation — that big, bold change. Imagine my surprise at discovering that such efforts benefit immensely from facing their inevitable sunset. In earlier posts, I challenged us to think of all our changemaking efforts as temporary. That if they endure, it is because they’ve had several lifetimes, not one. That the delusion that our changemaking initiatives will live forever benefits no one. In fact, the world loses when we put mission-focused organizations on life-support. On the analogy of your venture as a custom home, I illustrated why proactive exit planning is good planning. Now, let’s delve a little deeper into the reasons why exit planning may be the best investment you could make into the impact you target.
Future posts will guide you through developing your exit strategy and how you — as the changemaker at the heart of your venture — might prepare for it.
NOTE: As always with me, “venture” applies to any concerted effort to make a meaningful difference in the world, at any scale and whether governmental, for- or non-profit.
Another NOTE: Changemakers’ Substack is for everybody within the growing global community committed to perfecting the craft of creating big bold change. I post (a) actionable guidance on what might snag your efforts to make a meaningful difference in the world (this post), (b) world-leading research and debate on changemaking, and (c) my reflections on a life of a professional changemaker. While not every post may resonate with you, stick with me, please!
Why plan for exit?
Starting with the end in mind is accepted good practice. So, it is wise to run your venture with your eyes open to how you want that experience to end.
“If you don’t know where you are going, any road will get you there.” – Lewis Carroll
Image credit: piviso from Pixabay.
Plan for exit because either you or your mission will run out of steam, because it will supercharge your effectiveness while you’re at it, and because it will shore up your legacy after you’ve left.
Reason to plan for exit #1: Your venture may run its course.
I explored this reason in an earlier post, arguing that the world loses when we put mission-focused organizations on life-support.
Most non-profits should shut down. It’s for the best.
If the title irks you, this post is for you. It is also for you if you’d like to supercharge your efforts to create meaningful change in the world.
Reason to plan for exit #2: You may want an out
While I hope there will always be life-long and even intergenerational ventures, these are, statistically, a rare exception. Even if today, you can’t imagine doing anything but your world-changing venture, consider the longevity of the other “loves” in your life. Are you still with your first love? Living in the first place you ever chose? Eating the same thing for breakfast? If not, that’s quite alright. Just accept that you get to change your mind.
What got you out of bed this morning may one day lose that pull.
I have yet to meet a successful entrepreneur who feels the same about running their venture as they did about getting it off the ground. Many straight-up dislike and some even resent much of what their role has come to demand of them. Here, success is often to blame, as it tends to push the entrepreneur deeper into operations — payroll, supply chains, staff churn, maintaining accreditation — and further from what ignited their passion in the first place.
You may also know — or discover — that you, like me, prefer starting ventures over running them day in and day out.
Even if you still love it years in, life may demand that you cut your ambition short. This is common with government ventures, where any election cycle may shift priorities, serving as a built-in impetus for the changemaker to call it quits.
How dare I!? Stigma around exit planning
Tech start-ups have somewhat normalized exit planning: many don’t aspire to compete with the industry juggernauts but rather to be bought by them as soon as possible. If you have paid attention to the anti-monopoly discourse, you will recognize that some corporations have even gotten into trouble for buying competitors with the sole purpose of shutting them down.
This is a symbiotic system: with start-ups not necessarily eager to go the distance, corporates accept that it is cheaper, if not more effective, to delegate to them the messy business of innovation and experimentation. This is accomplished through corporate venture capital (CVC) teams whose purpose is to thoroughly vet and fund the most promising start-ups. Such investments increase the start-ups’ chances of acquisition by that corporate. Look up a major corporation, and you will likely discover a CVC arm/function.
All that said, exit remains a largely “dirty” idea for changemakers. In some circles, admitting that you consider any “out” is an anathema.
When was the last time you heard of a non-profit intentionally shutting its doors? A mission-driven entrepreneur be as passionate about their exit as they are about their venture’s potential? A government program owning that it only has a few years to make a meaningful difference?
How dare I not to be all in, forever, when the problem I am addressing is unlikely to be resolved in my lifetime?
However pervasive, this is a counterproductive misconception that I would like to change. In an effort to do so, I likened our changemaking efforts to custom homes in an earlier post.
Your changemaking efforts are like a custom home, but that’s not always a good thing.
In an earlier post, I challenged us to think of all our changemaking efforts as temporary. Seasonal. To embrace the probability that they will outlive their usefulness. That if they endure, it is because they’ve had several lifetimes, not one. That the world loses when we put mission-focused organizations on life-support. I argued that the best inv…
Reason to plan for exit #3: Supercharge effectiveness
If you have children, you know that every stage of their lives feels precious in part because you know it will end. The temporal nature of that experience brings your priorities into focus. Similarly, knowing that an exit is imminent supercharges our focus as changemakers. That clock is ticking, and we only have this amount of time to make the impact we seek!
We have recently explored how to assess whether our ventures — projects, organizations — are making the difference for which they exist. Well, impact assessment may also help you gauge when it is time to call it a day.
Want to know you’re making a difference? Let’s build your impact model!
In an earlier post, I introduced the concept of “impact,” explain why it (increasingly) matters, and argued that you create an impact model for your efforts to make a meaningful difference in the world. Now, let me guide you through building your impact model! It is time you get that certainty over whether you are making the impact you target.
Reason to plan for exit #4: Shore up your legacy
Did you know that most ventures don’t survive their founders?
I mean this in two different ways.
Perhaps like children, even exceptional ventures can be compromised by a founder (read: parent) who is not quite up to the task of enabling its wards to leave the nest. According to Noam Wasserman, author of The Founder’s Dilemmas (2013), 65% of start-ups fail due to founder conflict alone.
Of the few ventures that make it to a point where their founder(s) transition out, too many do not survive the transition.
In both cases, the founder(s) sabotage their creation; a phenomenon I find deeply saddening because having observed it countless times, I have yet to meet a founder who intended to or is okay with having undercut their venture.
This means that all those grand visions tend to get cut short, leaving investors, donors, and customers hanging if not outright jaded.
What most people miss is that without an exit strategy, there is no guarantee that all the investment of time, money, and goodwill is even an investment.
Whatever the actual future reason, you will want an exit. Might as well plan for it.
You, like those tech start-ups, may simply face an irresistible prospect to sell. That may be an opportunity that awards you a payout sufficient for taking your changemaking to a whole new level. And if you take investor money (including impact investments), you may not have a choice but to exit: exit is often how investors get their money back, with a return. Most investors will not want to stay on the ride for a decade even if you’d like to.
Exit planning helps create objective worth
Exit planning forces the question, “How valuable is my venture to anybody but me?” Like with that custom home, if you don’t ask this of yourself, you may be creating a worthless asset; a hard truth to swallow. Note that I am using “worthless” for its literal, transactional meaning.
Exit planning is a vital lens for creating objective worth, which is worth that could be tangibly extracted, for example — but not exclusively — in financial terms.
This may not concern you much: you may be wealthy or otherwise unfussed about a financial return, content with enjoying the ride for as long as it lasts. Nothing wrong with that, of course. In fact, hobbies are usually like that. However, my work chiefly focuses on ventures intended to appreciate over time; to create value that is not only in the eyes of the original beholder. Such value is vital to a venture’s ability to endure beyond its founder(s), and such longevity compounds their total impact.
What happens if you don’t plan for exit?
When your venture runs course, it will feel like a failure when it could feel like a success.
You may feel forced to exit your venture on terms other than ideal.
Your funders may be mightily unhappy with you.
Your venture will probably not to survive your departure.
Everything you will have done may have been for not.
Yep, dramatic. I am that passionate about exit planning.
Let me emphasize one of these points. In addition to undermining your venture’s impact, failure to plan for exit may also pit you against your investors. If you take investor money, you may be held legally liable if anything you do — or fail to do — compromises the security of their investment.
Naiveté is never a solid strategy. However, denial of the most likely scenario — that you or your venture will expire sooner than you think — can be both dangerous and heartbreaking.
If you don’t plan for exit, you risk sabotaging your efforts and legacy. By contrast, planning for exit is a way to accept reality and to ensure that your venture does exactly what you need it to do for you and for the world, and to do so within the time you can allocate.
In a future post, I will guide you to develop your exit strategy! Stay tuned.
To see how planning for exit fits into your entire roadmap to impact — from identifying your transformational ideas through vetting, funding, implementing, and scaling them to putting yourself in the best position to thrive — get your copy of Change-maker’s Handbook (2023).
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