Startup Exits
What VCs Really Want: A Clean Exit
Every investor conversation is secretly about the exit. Not if—but how, when, and on whose terms. Founders who ignore this early often pay for it later. Here’s how to stay aligned.
Let’s be honest:
Every conversation with a VC—from your first meeting to your last board call—is ultimately about the exit.
Not just whether there will be one.
But how it happens:
• Strategic buyer or financial buyer?
• Controlled exit or public moonshot?
• $300M in 5 years or $3B in 10?
If you’re not aligned on this early, things can get complicated—and fast.
I’ve seen it firsthand:
• Cap tables that collapse under misaligned incentives
• Term sheets that quietly favor one outcome over another
• Boards that push out founders—not for underperformance, but because their timeline didn’t match the fund’s horizon
Why?
Because VCs optimize for liquidity.
And if you’re optimizing for something else—legacy, market share, optionality—you might be playing a different game entirely.
Why Exit Alignment Matters More Than You Think
Here’s the part founders often miss:
A successful company doesn’t guarantee a successful exit—at least not for you.
You could have:
• A healthy business
• A growing team
• Strategic buyers circling
But if your board is made up of funds that need 10x returns in 3 years, and your path looks more like 5–7 years with modest multiples—you’re in trouble.
That’s when:
• M&A deals get blocked
• Acqui-hire offers are dismissed
• You raise another round just to buy time—but with worse terms
All because the exit math didn’t match the fund math.
Smart Founders Ask This Early
Here’s the simple but powerful move:
Ask every investor about their ideal exit path—before the wire hits.
Questions to ask:
• “What does a great outcome look like for your fund?”
• “How long is your typical holding period?”
• “Are you optimizing for IPOs, strategic M&A, or something else?”
• “Do you expect a board seat or control over exit decisions?”
This doesn’t just clarify expectations.
It surfaces hidden deal breakers before they become real ones.
Key Takeaway: Know Who You’re Getting Into Business With
Your investor isn’t just writing a check.
They’re shaping the strategic endgame of your business.
So don’t just focus on valuation.
Focus on values.
Ask:
• Are they aligned with your timeline?
• Do they believe in your vision for the exit?
• Will they support multiple potential outcomes—or only one?
Because the wrong match isn’t just bad vibes.
It can tank your company’s final chapter.
Final Thought
Fundraising is hard. But fundraising with misaligned partners is harder.
Startups don’t fail on exit day—they fail in how they planned for exit day.
Ask better questions.
Protect your vision.
And make sure you and your investors are scaling toward the same horizon.
Want to avoid deal term pitfalls before they hit your cap table?
Check out our Startup Capital Audit or book a 1:1 fundraising strategy session at