An Overzealous Founder's Exit Strategy: A Charlie Javice Review

An exit strategy is a plan for how a business owner or investor intends to leave a company or investment. The exit strategy outlines the methods and steps that will be taken to sell or transfer ownership of a business or investment to someone else.

An exit strategy helps to ensure that the business or investment is sustainable in the long term and helps to reduce the risk of making short-sighted decisions. An intelligent business begins with the end on mind and conceives an achievable exit strategy.

There are several different types of exit strategies that an owner or investor can use to leave a business or investment. These include:

1. Sale to a strategic buyer - Selling the business or investment to another company that is looking to expand its operations. This type of exit strategy is common in industries where there is a lot of consolidation, such technology and healthcare.

2. Sale to a financial buyer - This involves selling the business or investment to a private equity firm or other financial institution that specializes in buying and selling businesses. Financial buyers are often interested in businesses that have strong cash flows and growth potential. These buyers typically have already bought other similar companies in the same vertical.

3. Initial Public Offering (IPO) - This involves listing the business on a stock exchange and selling shares to the public. An IPO can be a good option for businesses that have strong growth potential and are looking to raise capital to fund expansion.

4. Management buyout - This involves selling the business or investment to the existing management team. This can be a good option for owners who want to ensure that the business is left in capable hands and who are willing to finance the sale themselves.

5. Liquidation - This involves winding up the business or investment and selling off its assets. This is typically the least desirable option, as it usually results in the lowest value being realized for the business or investment.

Now to the current news about Frank founder Charlie Javice, an overzealous founder reaching for a number. That run-on sentence was purposeful likened to the long run of this financial catastrophe. We all had those dreams of what we would do if we came up with a new app, got our chance in front of a shark, and dramatically walked away from thousands of dollars because we were confident that our business was worth more. I am speaking about a psyche of "start-up confidence."

Some of this confidence is necessary to achieve the feats of reaching millions of users. Yet, imagine the crushing blow when the climb is not as steep and may take longer. You have that magic number in your mind. That number is the number of users necessary to reach a certain valuation mark when you can cash your chips in.

What happens when that number is not reached? Most founders will pivot their strategy, refine the UI, increase engagement or the hundreds of other options. Charlie Javice instead allegedly chose to defraud a financial buyer into paying more for a lot less. A lesson in caution. Do not get ahead of your skis. Be honest. Have honest advisors and stay on the straight path in business because windy paths may cause sharp falls.