Many scipreneurs take too long to start discussing money. Sometimes there's a bit of pride in deciding that you are not on this journey to get rich but to make an impact.

Although it is a commendable goal, the only thing that keeps a company alive is money. If there's no money, you won't be able to pay salaries, build the next version of your product, or make any impact at all.

Bootstrapped or VC-backed companies will have very different approaches to exit strategies.

Entrepreneurs of bootstrapped companies (and perhaps employees) are the sole owners and have full power in deciding what to do. If the business is sustainable, which means you are making at least as much money as it takes to run it, you can keep going forever. You pay the salaries and you decide how the profit of the company is re-invested (or paid out).

On the other hand, if the company has received investment, there must be a way of repaying what was given. That's why, sadly, the words "VC" sometimes get bad press in scipreneurial circles: they are these profit-maximizing machines that will eat you alive and spit you out. Finding VCs that align with your objectives at different timelines is not impossible, you have to be able to have those discussions.

Since the most common path is for investors to receive shares in the company, the way they can make a profit is if the overall value of the company goes up in time and they can cash in.

A clear point in time when shares are sold is when the company gets acquired. Someone makes an offer for the totality of the company, fixing the value of the shares. Being acquired is an exit strategy because shareholders will stop having shares, they will trade them for cash or shares in the other company.

When a company grows enough that can go for an IPO (trade its shares in a public market), shareholders are free to decide whether to cash in or keep shares for the longer run. Perhaps speculating on further valuation increases or as part of de-risking other financial strategies.

Bootstrapped companies don't have the pressure of creating an exit strategy unless that's what the founders are set to achieve. There's no return on investment since there was never an investment to begin with. It does not mean a bootstrapped company can't be acquired, it just means there is no specific need to have an exit strategy from the beginning.

For many deep tech companies, an exit strategy in the form of a strategic acquisition is the only path to reach the scale needed to lower costs, reach global markets, or outpace competition.

It is always a good sanity check to explore who the bigger players are, and who can acquire your company. From Thermo Fisher to Malvern Panalytical. From Pfizer to AstraZeneca.

Most deals are not public, but once you have been at it for long enough, other entrepreneurs will give you ballpark estimates. It will mostly come down to how many sales you have and your ability to keep up with them. If you show a healthy pipeline of deals that won't dry up in a few months, you can estimate how valuable your company is.

Being acquired for founders

The entire process of being acquired has very different meanings for founders than for investors. On the one hand, there's the emotional challenge of transferring ownership of the project you've worked on for years. On the other, there's the question of what will happen to people.

Not every acquisition is the same, and there'll be many discussions involved to iron out details. For scipreneurs, however, it's important to keep in mind that many acquisitions come with vesting periods for founders. That means that to receive the payment, founders need to stay on board for a fixed time.

This is mostly done to ensure continuity and proper handoff of projects. However, it may also mean that founders need to relocate and that they'll end up working at a larger corporation.

Whether that's acceptable or not, will depend on each person. Commuting from Europe to the US for 4 or 5 years may not be everyone's cup of tea.

On the other hand, when discussing acquisitions, founders may not have a lot of sway. At that stage, investors will probably have control of the company, and chances of leaving a healthy return on investment on the table may be out of the question.

There's also another likely scenario in which founders are no longer the managers of the company. As time passes, perhaps there's a need to bring on board people with more experience or specific industry contacts. In that case, the value of keeping the founder in the company is relatively low.

The future of the employees of the company is, however, much more uncertain.

Once your startup is acquired, most employees will be offered a space in the new structure. But restructuring is also likely. Sometimes people will find ways of transitioning to other roles in the new company, sometimes they'll have to leave.

If scipreneurs took care of building value for everyone, for example through stock purchasing plans, every employee could benefit financially from an acquisition. That bonus can be the differentiator that gives tranquility in the transition.