Insights and Opinions

How to exit from your own startup

An exit can happen at anytime

Whether you got voted off by your board or it's just time for a new career challenge, leaving a top position at a company you founded can deeply impact your sense of self. Take time to discuss these feelings with friends, a therapist or cofounders. Think deeply about what it was about starting a business that made it special or interesting to you. A new career search can be very exciting once you deal with moving on in way that works for you.

Keep communicating with your ex partners

Business partners may feel like exes at times. So when you're still in love with your old startup or just want to help grow your shareholder value, you've got to suck it up and stay friendly. Don't drop off the radar as you create your next cause. Stay in touch with a weekly text or call to the partners that matter to you most. Offer to help them out whenever possible while staying true to your noncompete.

Create founders agreements prior to outside investment

Founders agreements can take the form of articles within your incorporation documents or can be included in a founder's employment agreement. Founders agreements imply protections, in the sudden case of an exit or firing, beyond what standard employment agreements generally cover. You can even use a founders agreement to delineate founder-specific vesting schedules, set aside time for personal projects and outline exit parachute terms. A founders agreement can also outline shareholder preferences created for founder-specific liquidity events.

Don't give up, entrepreneurship is hard

Despite your recent success remember that most new businesses fail. So if your second startup seems impossible to get off the ground, then you may have not have beat the odds this time. Whether you made some bad assumptions in your go-to-market strategy, your team fell apart or you just plain failed, keep at it. Aim for success while casually preparing for entrepreneurial disasters - like sudden changes in your income level or industry focus.

Stay in touch with old customers

Your resume as a founder may lead to a few phone calls and background checks. Stay in touch with customers from your prior business to ensure new investors and partners hear first hand from folks you spent lots of time working with. Customers who loved you or your business make for excellent references.

Dinesh Ravishanker is an entrepreneur, and was the founder of Callfire. He tells the tale of how he parted ways with the company in his personal blog.