Startup Exit Strategy: I’ve Sold Three Companies. Here’s Why I’m Not Selling This One.

I’ve sold three companies. VinSolutions in 2011 for about $147 million. Stackify in 2021. And a smaller one called At Capacity before either of those. So when someone asks me about a startup exit strategy, I’m not repeating something I read. I’m telling you what it actually felt like on the other side of the table.

Here’s what surprised me about every guide on this topic. They all start with the same question: which type of exit should you aim for? Acquisition, IPO, merger, buyout. Pick your door.

That’s the wrong first question.

The first question is whether you should sell at all. And almost nobody writes about that honestly, because most of the people writing about exits have never sold anything. I run a company right now, Full Scale, that I have no plans to sell. After three exits, that’s a deliberate choice, and I want to walk you through why.

What a startup exit strategy actually is

A startup exit strategy is your plan for how you, and anyone who invested alongside you, eventually turn your ownership into cash. That’s the whole idea. You built something worth money, and at some point you want some of that money in your pocket instead of locked inside the company.

If you raised venture capital, you don’t really get a choice about having one. Your investors handed you money expecting it back, with a large multiple, inside a fund’s lifetime. Their return only happens when you sell or go public, which is exactly what they’re underwriting when they cut the check. So the exit was baked in from day one. That’s worth understanding before you raise, not after.

One myth to kill early: the IPO is not the normal ending. It’s the rare one. Going public gets the headlines, but acquisitions are how almost everyone actually exits. Back in 2018, venture-backed companies saw 799 acquisitions against just 85 IPOs. That ratio hasn’t softened. In 2025, M&A is still how almost every venture-backed company exits, and going public stays the rare exception.

So when you picture your exit, picture a sale to another company. That’s the realistic version for the vast majority of founders.

Before you pick one, ask whether you should sell at all

This is the question the other guides skip.

If you’re running a profitable, growing business, why would you sell it?

I ask founders this all the time and it stops them cold. They’ve been so trained to chase the exit that they never checked whether the exit was a good deal for them.

Run the math on what you actually own. Full Scale is growing around 20 percent a year at roughly a 20 percent profit margin. That’s a machine that pays me well every year and is worth more next year than it is today. Show me where I can move that money and reliably earn more than 20 percent, and I’ll consider selling. I haven’t found that place yet. The stock market won’t do it. Real estate won’t do it. Another startup almost certainly won’t do it.

A healthy company you control is one of the best investments you will ever hold. When you sell it, you trade that machine for a pile of cash and then you have to go find something to do with the cash. Usually that something earns you less than the machine did.

So selling a great business to chase a “better” return often means trading down. People rarely frame it that way, but that’s what’s happening.

That doesn’t mean never sell. It means the bar is higher than you think, and you should make the company prove that holding it is the worse option before you let it go.

The one honest reason to sell, and the middle path most people miss

There is one reason to sell that holds up no matter how good the business is, and it has nothing to do with the business. It’s your own risk.

If your entire net worth is locked inside one company, you are exposed. A bad year, a lost contract, a new competitor, a health scare, and the thing that holds most of your wealth can drop in value fast. Wanting to get some of your money off the table is completely rational. That’s diversification, and it’s the real engine behind most exits, even the ones people dress up as something grander.

Sometimes a full sale genuinely is the right move. If your whole net worth rides on a single product with a couple of big customers, or you’re burned out, or someone offers a number that already prices in years of growth you aren’t sure you can deliver, taking the clean exit and sleeping at night is a rational choice. I’m not arguing you should never sell.

But here’s what the exit guides almost never tell you. Diversifying your wealth and selling the whole company are not the same thing.

You can take money off the table without handing over the keys.

You can sell a minority stake to an investor and keep control. You can do a secondary sale, where you personally cash out some shares while the company keeps running. You can recapitalize. Secondary sales have become a regular part of the venture liquidity mix, precisely because founders figured out they don’t have to choose between all in and all out. I do this kind of thing through Full Scale Ventures, backing other founders as a minority partner, and it’s a far better setup for many of them than a full sale would be.

So before you sell everything to feel safe, ask whether you can sell a slice instead. Often you can get the security you actually want while keeping the asset that’s making you rich.

What nobody tells you that you lose when you sell

The exits I’m proudest of are also the ones I think about with the most mixed feelings.

Some days I wish I never sold VinSolutions. It would be a unicorn now.

I sold a company I had bootstrapped to $35 million in annual revenue, the number one CRM in the automotive industry, and the market kept growing for years after I left. That’s the part the celebration photos never capture. When you sell, you don’t just hand over the company. You hand over every dollar it would have made for the rest of its life. You’re betting that the cash today beats the company tomorrow, and sometimes that bet is wrong.

And a big exit doesn’t fix whatever you thought it would fix. The money is real and it matters, but the day after the wire hits, you are the same person with the same problems. I’ve watched founders chase an exit like it was a finish line, then feel strangely empty once they crossed it.

There’s a deeper cost too, and I got into it on my podcast with Eric Ries, the author of The Lean Startup and a new book called Incorruptible. Eric’s whole argument is about what happens to companies after they’re sold, especially to private equity. He has a line about the right level of success that stuck with me: you want to be “successful enough that they make money and stick around, not so successful that they get bought by private equity.” Because once the new owner is squeezing every dollar out of the thing you built, the soul of it usually dies. As Eric put it, you can “taste the ownership structure” in the products around you that got bought and gutted.

I’m not telling you to never sell. I’m telling you to know exactly what you’re handing over, and to whom, before you do. I shared the full Stackify story, including how it later moved from Netreo to BMC, in my Stackify exit write-up if you want the play by play.

The exit options, from someone who’s been on the selling side

When selling is the right move, here are the real options and when each one fits. I’ve put them in plain terms, the way I’d explain them to a founder over coffee.

Exit type	What it is	When it fits
Strategic acquisition	A larger company buys you for your product, customers, or technology	You’ve built something a bigger player wants to own rather than build. The most common good outcome.
Acqui-hire	A company buys you mostly for the team	The product didn’t break out, but you have strong engineers. A soft landing, not a windfall.
Private equity buyout	A PE firm buys a controlling stake, usually of a profitable company	You want liquidity and you’re willing to accept new owners focused hard on margins. Read Eric’s warning first.
IPO	You sell shares to the public market	You’re large, growing fast, and can carry the cost and scrutiny of being public. Rare, and not the goal it’s made out to be.
Secondary or recap	You sell some of your shares while the company keeps running	You want to take money off the table without giving up control. The underrated middle path.
Management buyout	Your own leadership team buys the company	You trust the people who already run it and want continuity over the highest bid.
Wind-down or liquidation	You close up and sell off whatever assets have value	It isn’t working and an orderly close beats burning more money and time.

Most founders fixate on the strategic acquisition and the IPO and ignore the rest. The secondary sale, in particular, deserves a lot more attention than it gets, because it solves the diversification problem without forcing the all-or-nothing decision.

The headline price is not what you take home

Here’s something the other guides gloss over. The number in the press release is not the number that lands in your account.

A lot of deals are structured with an earn-out, where part of your payment depends on hitting targets after the sale. My honest advice is to assume you won’t see the earn-out money. I’ve had it go both ways, but the deck is stacked against you. The moment a new boss and a new owner walk in, they change your priorities, they distract you, and they change what you work on. You change too, because you care about different things once you’re no longer the one in charge. For all those reasons, earn-outs are fraught with problems.

Escrow holdbacks are usually less of a headache, but not always. In one of my deals, the holdback was written so the buyer alone could declare a dispute and refuse to pay it. That’s exactly what they did. It was a cheap shot, and there was nothing clean to do about it, because nobody wanted to sue over it. We lost a couple million dollars and moved on.

All of these details matter, which is why you need a good attorney and good advisors before you sign anything.

What due diligence actually checks (it wasn’t my code)

If you’ve read other exit guides, you’ve seen the advice to clean up your codebase before you sell, like a buyer is going to send engineers to grade your architecture.

In three exits, that was never the thing.

Nobody crawled through my source code line by line and adjusted the price over it. What they dug into was the boring, unglamorous stuff: the financials, the contracts, the cap table, how concentrated the revenue was in a few big customers, and how dependent the whole operation was on me personally. That last one matters more than founders realize. If the company can’t run a week without you, a buyer sees risk, and risk lowers the price.

So if you want to make your company more valuable and more sellable, the work is building a business that runs without you as the single point of failure, not polishing your codebase.

That means a real team, with real ownership, that keeps shipping when you’re not in the room. It’s the same thing I’d tell you about building a software company or starting a SaaS without burning your runway from day one: build it to run without you. Building that kind of bench is most of what I do now. It’s why I’m such a believer in staff augmentation done right, with engineers who stay long enough to own real parts of your product, and it’s the same principle behind why I wrote Product Driven.

That’s the quiet upside of building like you might never sell. You end up with a company that’s both more valuable to a buyer and more worth holding onto yourself. Which brings me right back to the question I started with.

Thinking about whether to build or sell?

The same thing makes a company worth holding and worth buying: a team that keeps it growing without depending on any one person. That’s the team we help founders build. Book a call with Full Scale and let’s talk about what your engineering org needs to get there.