Somewhere near the end of your investor pitch and business plan, you must include an exit strategy. I usually get pushback on this element for the following reason. If your startup is your dream, why would you want to think about an exit? It's going to be so successful and so much fun that you don't need to think about what comes after. Wrong. There are two very real and practical reasons why you need to plan an exit:
Outside investors want to collect their return: Remember that equity investments are not like loans with interest. The investor sees no return until they cash out, or the company is sold. Even three years is a long time to wait for any pay check.
Entrepreneurs love the art of the start: Assuming your startup takes off, you will probably find that the fun is gone by the time you reach 50 employees, or a few million in revenue. The job changes from creating a work of art to operating a cookie cutter.
In three to five...