The #1 mistake founders make?
They don't know when to move on.
Here's when to sell your company.
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