When Is an Early Exit the Right Choice for Companies?

For early and expansion stage organizations, there are times when an early exit might be a good idea. Dr. Basil Peters, an expert in the early exit, has seen many instances where scaling a business and exiting quickly paid off. But as Peters says, an early exit is a viable option in many instances — but not all.

The choice comes down to immediate profit versus lost potential revenue. Predicting future revenue is never a concrete process, but an unbiased analysis should be able to provide some insights, he says. Another factor to consider is the amount of time before the exit. According to Peters, one study showed that after hitting the exit apex in the fourth year, every successive year thereafter resulted in a less profitable exit.

That could serve as an incentive to companies weighing their exit options. For more on the appropriateness of an early exit for your company, watch the video featuring Peters.