Time to Move On? When to Sell Your Software Company


Table of Contents

The #1 mistake founders make?

They don't know when to move on.

Here's when to sell your company.

Hard Reality

70% of VC-backed companies return 0–1x

Too many founders hang on and continue to pivot and waste years after everyone sees a big exit is unlikely.

They stick with their zombie company.

Even when their equity is buried under a preference stack mountain.

Typical Founder Career

The lifespan of a typical entrepreneur is approximately 15 years. Then they often have to take a job to pay their mortgage, childcare, etc.

If you stick with each company for 7-8 years, that's only two shots on goal.

Not great odds.

Portfolio of Small Bets

VCs know it’s incredibly difficult to create a unicorn so they take a portfolio-based approach.

They spread their bets around. Founders should do the same.

Take your learnings and try different markets. You want more shots on goal to find a winner.

Time-Based Portfolio Approach

As a founder, you need to create your own portfolio.

The solution is to relentlessly time-box each company. Maximize the number of shots taken.

If you limit your attempts to 2-3 years, then you can try 5-8 startups in 15 years.

When to Exit

You should always be evaluating your exit velocity.

Are you growing revenues 3x/3x/2x each year to exit as a home run? Keep going.

Growing 20% and hoping that magically turns to 200%? Time to exit and take your talents to the next one.

But What if You Pivot?

90% of unicorns never pivoted.

But 90% of unicorn teams worked together previously.

And the average founder age is 34.

Seasoned founders and teams are best positioned to make that homerun after leaving their base-hit startups behind.

TLDR Founder Small Bets Approach

- Create a portfolio of startups over time

- Be honest about your velocity

- Time box your startup tries

- Careful for pivot trap

- Test more markets