Exit strategies aren’t there for the VC’s and the bankers, they are there for the owner! Every business owner needs a succession plan to provide for the orderly transfer of the business in case s/he walks in front of a truck, has a stroke, wants to retire, desires to give the business to the kids, etc.

Your statistics are informative and useful. Your condemnation, on the other hand, cites an abuse that afflicts only a small portion of the millions of businesses out there.

The exit strategy is a significant part of succession planning, which is all about creating LEGACY, preserving/growing the LIQUIDITY needed to maintain lifestyle “after work,” and LETTING GO, since none of us goes on forever.

Freddy’s Comment: We’re talking about two completely different things here: an “exit strategy” in a start-up business plan is NOT a “succession plan.” Indeed, any entrepreneur under 60 would look incredibly naive to be discussing what should happen in case of his death in a document prepared for VC’s.

This article primarily refers to Silicon Valley entrepreneurs, many of them young and hardly thinking about death or even a legacy. Are they planning to leave their enterprise to their kids? Yeah, right. What kids? Most are thinking about how to cash in ASAP and move onto the next project. That results in companies so poorly structured that they have shorter lifespans than gerbils. These businesses are so flimsy, there would be nothing to leave behind in case the entrepreneur stepped in front of a bus. It’s not the mortality of the entrepreneurs that’s at issue here; it’s the life expectancy of their ventures.

Freddy, always a pleasure to read your posts. Keep them coming!

Freddy’s Comment: Good point, though I was addressing start-ups, not established companies. Check out that Inc magazine article I referenced in my post, since it’s a good response to your question. And as I mentioned in my earlier post on Marketing Myopia, the key is for firms to evolve, not look for the exit door.