Like the world continues to be affected by the digitization process, the demand for fintech services continues to grow. The outlook for this sector is highly optimistic, with reports predicting that it will happen reach 1.5 trillion dollars until the end of the decade.
However, as more and more players seek to establish themselves, the competitive landscape is becoming much fiercer. Meanwhile, available funding is finite and in 2023 was significantly lower compared to previous years. Market data from S&P Global shows that funding to global fintech companies fell by 49% in the first half of 2023.
In an oversaturated market where so many companies are fighting for survival, successfully completing an exit is a powerful symbol of success. However, it is not a simple task to achieve. Whether the company’s efforts will bear fruit depends largely on how the leader thinks and what strategy he chooses to emphasize.
So what does it take to successfully plan and execute an exit? As an entrepreneur and startup founder with several such cases in my portfolio, I would like to share some of the ideas that have helped me succeed and close deals over the years.
When should you start planning an exit strategy?
First of all, if we are talking about planning an exit strategy for the startup, it means that you have already evaluated the potential buyers in your chosen market and are considering various scenarios that may affect the value of the startup in their eyes.
As more players seek to establish themselves, the competitive landscape becomes much fiercer. Meanwhile, available funding is finite.
The most obvious influencing factor here is, of course, the product you’re offering. If you are building a startup with the intention of selling it later, then you should think about it from the beginning. Product selection greatly influences the creation and organization of an exit strategy for your business because it helps you determine in advance who your potential buyers will be.
Generally speaking, with a project of any size, you’ll need at least a year and a half to get some sort of tangible understanding of your product’s market fit. From that point, you can start planning an exit strategy.
If you have previous exit experience to draw on, you can also consider that. Calculate how long it took you to achieve a certain valuation in the past and you can expect your new business to achieve a higher value twice as fast.
