Scale or Sale

This chapter covers the critical point in the life of every startup: should it continue to scale towards an eventual IPO or should the founders exit. This question is critical as it forces the founders to ask where the value will arise in case the startup is sold, as a large majority of startups do end up getting sold after raising anywhere between $10 m to 200 m. If the startup decides to scale, having raised $10 to 50 m, we discuss the various funding options and their implications. If it decides to sell, the two options that account for a majority of exits as well as how to maximise the value on exit are also discussed. The option of a partial exit that can maximise the value to the startup or directly for the shareholders and how this can be structured are also covered.