When It’s Time to Move on From a Successful Startup

One of the harder conversations I have on an infrequent but recurring basis is meeting with entrepreneurs who are gung-ho, motivated, and excited about their stalled startup. Of course, they don’t want it to be a stalled startup. They want to keep growing and expanding, but for whatever reason, it’s not in the cards.

Last month, I had one such conversation with an entrepreneur who had built a small business with many customers. Yet, no matter what he tried, the growth wasn’t there. Over the course of many years, he had willed the business to a sustainable size with a dozen employees, but the ceiling had been reached. Unfortunately for entrepreneurs, this is one of the most challenging situations. After years of blood, sweat, and tears to build a business with paying customers who love the product, and a strong desire to grow, it becomes clear that, at this moment in time, with this product and this team, further growth isn’t going to happen.

For this particular entrepreneur, I asked a series of questions:

• If you weren’t working on this business, what would you do?
• If you stepped away from the company, what percentage of your growth plans for next year would be achieved?
• If you found a buyer and sold the business, what would the acquirer do with it?
• If you could wave a magic wand, what would you change about the business?

Knowing I will never know as much about the startup as the entrepreneur does, my goal is to get them thinking from a first-principles perspective about where the company is headed, what’s best for the business, and what’s best for them at this stage of the journey.

As expected, this is often a difficult and awkward conversation for the entrepreneur. Everyone—rightfully so—tries to be supportive, encouraging, and focused on helping them continue to grow the business. However, sometimes the entrepreneur has done everything in their power, and it no longer makes sense to continue down the same path.

As an entrepreneur, operating in these gray areas, where there’s no perfect information and judgment calls must be made, is part of the journey. Sometimes, the call that needs to be made is to move on and find a home for the startup so the entrepreneur can make things right by the employees, partners, and investors. Then, the entrepreneur can start their next journey.

When further growth and new milestones are no longer achievable, it may be time to evaluate all opportunities and consider whether it’s time to move on from a successful startup.