Why you should always have a ‘happy exit’ plan for your startup
Even if an entrepreneur is getting good money to sell their startup, in the absence of a ‘happy exit’ plan, they may end up with serious ‘seller’s remorse’, according to serial entrepreneur, K Srikrishna.
When serial entrepreneur, K Srikrishna, was asked by one of his early advisors, Pravin Madhani (also a serial entrepreneur), “when do you plan to sell your business?” merely a couple of years into his startup, it upset him to no end.
He went home to his wife and said, “I'm never going to meet this guy again!”
However, Srikrishna later understood the essence of what Pravin was trying to say, and the two remain friends till date. Pravin is, in fact, one of the people featured in Srikrishna’s book, ‘The Art Of A Happy Exit: How Smart Entrepreneurs Sell Their Business’, published by HarperCollins in March.
The book is an attempt to help entrepreneurs prepare for all that selling a business involves, including the mental impact of it.
The book chronicles the stories of twenty entrepreneurs across India and the US who've sold their startups to varying degrees of happiness.
K Srikrishna's book attempts to help entrepreneurs prepare for all that selling a business involves
Srikrishna founded his first company, Impulsesoft, in 1999, which grew from a bootstrapped organisation of two people to a global leader in bluetooth wireless stereo music.
It was angel funded by Infosys co-founder N S Raghavan. In 2006, it was acquired by US-based SiRF Technology. Srikrishna, who is currently a professor of entrepreneurship and innovation at Northeastern University in Boston, was also one of the founders of Zebu Communications, a gaming startup. A PhD in engineering from the University of California at Berkeley, Srikrishna is a veteran of four entrepreneurial ventures.
Srikrishna tells YourStory Founder and CEO Shradha Sharma about one of the entrepreneurs featured in the book,
who was “miserable” even after selling his startup for $45 million in an all-cash deal after planning the exit for five years.
“He ran his business for almost 18 years, he built it from ground up, he owned 100 per cent. More importantly he planned for five years to sell the business. He sold the business for $45 million all cash, no partners, no debt. Then he says I spent the next one year being utterly miserable. So, you know, this makes no sense,” he shares.
Most would find this bewildering and wonder why an entrepreneur would be unhappy after making money from an exit.
Srikrishna explains that amidst all the talk surrounding growth and scaling, somewhere the important discussion about an exit plan is often ignored.
“Many times selling a business is not about the money. It's really about what you want, what others want, maybe even what the buyers want.”
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There are instances where small entrepreneurs after selling their business to a large corporation, take on the role of, say a general manager in the organisation, but are unable to reconcile with their new position.
Similarly, some think they’ll go boating and golfing after selling their business, or travel the world, but struggle to settle into their new lives. According to Srikrishna, this happens because once they get a good exit, many entrepreneurs take it up without focussing on what follows.
The book also delves deep into what is known as ‘seller’s remorse’. According to Srikrishna, even those entrepreneurs who may have thought about an exit, can end up with deep regret or guilt. The opening story of the book details one such journey of an entrepreneur who sold their business and made “a lot of money” but wasn’t happy after the exit. The Art Of A Happy Exit: How Smart Entrepreneurs Sell Their Business’ is available on Amazon and Flipkart.
