# How to leave an entrepreneurial role

After you've started seeing a profit, you should start considering how you plan to leave the organization.

- Beyond [the business plan](entrepreneur-3_plan.md), have a long-term goal if you want *anything* beyond simply yourself (or possibly your [family](people-family.md)).
- When you start getting bored with the business, you should sell it.

If you have a good-enough business idea and promising-looking [financial statements](money-accounting.md), you can still sell the company even when you haven't turned a profit yet!

- You're almost guaranteed to have a marketable business, even if it loses money, if you own [high-demand](money-economics.md) [intellectual property](legal-ip.md) tied to the company.

Logically, there are only several possible ways you can go:

1. Sell the business outright and leave with a significant amount of wealth.
2. Develop better [management skills](mgmt-1_why.md) and scale it to a very large organization.
3. Give the business to your [children](people-family.md) when they're old enough to run it.

## Failing

Learn when to stop.

- Most business ideas do *not* take off, and that's okay.
- Avoid going deeper into debt and wasting more of your life than you need to.
- Create a fixed, measurable limit on how much you'll go until you stop (e.g., no more than $10,000 of savings into the business).

## Selling

Selling is generally a better idea than scaling, mostly because large-scale organization management is an [*entirely* different skillset](mgmt-7_changes.md).

- Further, you have the opportunity to [diversify](money-investing.md) the wealth you've acquired through building your business to that point.

If you wish to sell the business, you have several options:

- Propose a merger with another similarly-sized company.
- Sell the company to a larger company as an acquisition.
- Take the company public and sell it on a stock exchange.
- Sell the company internally as an [Employee Stock Ownership Plan (ESOP)](money-accounting.md).

Try to sell before you have to.

- Buyers want to feel "blue sky potential" and get excited about the growth they expect to see.
- If it's already at its peak, it won't inspire as much excitement.

Unless you're in an industry that doesn't care about [brand](marketing.md), the value of the company is *not* simply its [asset value minus its liabilities](money-accounting.md).

- You have built a reputation, and the premium over the equity value of the company is the direct market price of your company's name's [reputation](people-image-why.md).
- Most buyers are asking what financial gain your reputation will have on the future, then discount it over that window of time.
  - e.g., if they expect to gain $10 million from your company's brand within 3 years, they may propose buying it for $3 million but be willing to [haggle](people-conflicts.md) up to $5 million for it.

### Mergers & acquisitions

Bear in mind what mergers and acquisitions will do to your organization:

- When you're in a merger, you're officially partners with whoever runs the other organization.
- When in an acquisition, staying on with the organization makes that company's leadership [*your* boss](jobs-1_why.md).

If you plan to interest a company in an acquisition, contact the CEOs who were interviewed in a major publication (e.g., Forbes).

- Generally, CEOs who have had their ego stroked publicly will pay a premium of 4.8% more for every major article they've had.

Most mergers and acquisitions (83%) do *not* boost the value of the company.

- Only do it if you want to be completely rid of the company.
- Be careful, though, since you might be selling it to a *very* [unhinged](mind-neurodivergence.md) person.

## After selling

Do *not* retire.

- If you have [a personality that can start a business](entrepreneur-1_what.md), you do *not* have the personality that would find comfort in endless recreation.
- After succeeding, most entrepreneurs [start *another* business](entrepreneur-2_idea.md), create a [not-for-profit](entrepreneur-3_plan.md), or [mentor *other* entrepreneurs](education.md).

## Tech entrepreneurship exit strategies

In the tech industry, [intellectual property](legal-ip.md) is *everything* related to software. To that end, the risks of intellectual property theft are so strong that any organization observing your startup has every incentive to learn what they can and imitate the idea.

If you plan to sell your intellectual property or entire startup organization to a large company (*especially* [Big Tech](faang.md)), get lawyers involved in the process as early as possible.