The Exit Mindset When Raising Capital

We understand start-ups, we too are a start-up in an early phase. We have joined the scaling journey for many companies, and have learnt the importance for a well thought out exit strategy. 

For example, the key factor for high-growth is steady cash flow and financial stability. When entering the growth phases of the business cycle, funds are critical and equity capital can be the lifeblood of the business. This primary resource comes from a variety of individuals and institutions, each with different expectations and preferences, each will require strong reassurance that their ROI expectations can be met and what can be achieved, realistically.

For that reason, having a viable and appropriate exit strategy is vital. Firstly, it signals that you know your limitations, and second, it testifies that you have a contingency plan in place. These are dynamic times and creative solutions are needed in avoiding or distancing external business challenges. Understanding your maximum capacity might be one of the most overlooked skills in the growth capital space, and yet, we know very well that everyone and every team has limits, nobody can do everything on their own. 

Raising funds is hard work, it requires a strong understanding of what your team can actually achieve, this must be established with realistic projections, mapped to specific time periods. Considering what the exit could look like, just means that there is a plan from start to finish. To most founders, exit means selling the owner’s stake in the company. However, sometimes they may choose to hire a management team to run the business while retaining their equity. We’ve seen this in many examples from Silicon Valley when founders took a step back, bringing in an experienced CEO to grow the company further. 

It is important to plan your exit strategy as early as possible, even if doing so is not your intention. Make sure to put in extra time to develop a clear exit plan as part of your business plan and investors’ pitch. 

At Kapvista, we help founders raise capital by introducing prospective investors that are looking for exactly what your company may have to offer.

Daniel Hallawi - CEO at Kapvista

Kapvista News and Media

To be updated with the latest Kapvista news and media:

To receive our pick of great content and stay up to date with Kapvista’s capital raising insights.

Browse by category

Select a category to display all items of that category:

Enjoy our latest

Extend your break and enjoy these related posts:

  • KapVista’s Ecosystem Education
    The Research and development (R&D) tax incentive is the government’s key mechanism to stimulate Australian industry’s investment in R&D. R&D is often the first critical step in innovation, it drives technological improvements which lead to productivity improvements and increased economic growth. Unfortunately, companies tend to underinvest in R&D for several reasons, including:◆ not being able to capture the benefits of their R&D because new knowledge tends to leak out or ‘spill over’ to benefit competitors and the rest of the economy ◆ difficulties finding external finance because of uncertainties around the likely success of their R&D projects.This is why the government has a role to play in encouraging industry to invest more in R&D. The tax incentive offers a way for companies to invest in R&D while alleviating some of their initial reasons for not investing.
  • What they don’t tell you about capital raising
    Successfully raising venture capital is a goal for many business founders. An influx of cash can be vital not only to growth, but also liquidity and maintaining day-to-day operations. However, whilst many focus on the outcome of getting the capital, it is important not to forget the downsides, pitfalls, and challenges that are underway before a raise is completed.
  • Mastering the pitch: What they don’t teach you about presenting
    Whether you’re only starting to plan raise capital, or have been doing this for a while, being able to present your ideas efficiently is a vital skill at any stage. Preparation is key – of course – however, what’s equally important yet often goes underestimated, is the thought and effort that must go into delivery and presentation.