How should we answer "what's your exit strategy?" in a pitch?

Name 3-5 realistic strategic acquirers by name, with 1 sentence on why each would care. Don't say "IPO" unless you have a credible path there. Vague answers signal inexperience.

Should we hire an M&A advisor early?

No. Advisors add value at deal stage, not exploration. Early exit conversations should be founder-to-CEO of the acquirer, direct.

What acquisition multiples are realistic?

3-8x ARR for SMB SaaS. 8-15x for high-growth mid-market. 15x+ for strategic must-haves. Depends on growth rate, retention, and competitive dynamics of the acquirer.

Exit Strategy: What to Actually Plan For (2026)

Most exits aren't planned — they happen when the right conversation lands. Here's how to build a company that has real exit options.

Exit Strategy for Startup Founders

Investors ask about exit strategy in every pitch. The honest answer is that pre-revenue startups don't plan exits — they build companies durable enough that exits become options. Here's how to build that optionality without pretending to predict the future.

The three real exit paths

1) Acquisition by strategic (most common — 90%+ of exits). 2) Acquisition by private equity (growing category, requires $10M+ ARR and profitability path). 3) IPO (rare, requires $100M+ revenue, high growth, clear public-market story). Everything else (SPACs, direct listings) is a variant.

What makes a company acquirable

Clear category leadership in a defined market. Clean cap table and legal history. Predictable revenue with strong retention. A specific set of "strategic acquirers" whose roadmap you'd accelerate. Founders willing to stay 2-3 years post-close.

The wrong things to optimize for exit

Building for a specific acquirer's roadmap (they'll pass and you'll have no product). Chasing acquisitions before real revenue (acqui-hire prices are low). Timing the market (impossible). Making decisions to look good in a data room (they cost you in the meantime).

When exit conversations start

Usually inbound at $10M+ ARR from strategic corp-dev. Investment bankers get involved at $50M+ ARR for company-driven processes. Below that, exits happen through relationships and opportunistic outreach — not from hiring a banker.

Frequently asked questions

How should we answer "what's your exit strategy?" in a pitch?: Name 3-5 realistic strategic acquirers by name, with 1 sentence on why each would care. Don't say "IPO" unless you have a credible path there. Vague answers signal inexperience.
Should we hire an M&A advisor early?: No. Advisors add value at deal stage, not exploration. Early exit conversations should be founder-to-CEO of the acquirer, direct.
What acquisition multiples are realistic?: 3-8x ARR for SMB SaaS. 8-15x for high-growth mid-market. 15x+ for strategic must-haves. Depends on growth rate, retention, and competitive dynamics of the acquirer.

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