Strategizing your fintech exit in a turbulent market — top 3 questions to tackle

As the world continues to be influenced by the digitization process, the demand for fintech services keeps growing. The outlook for this sector is highly optimistic, with reports predicting that it will reach $1.5 trillion by the end of the decade.

However, as more and more players seek to establish themselves, the competitive landscape grows that much fiercer. Meanwhile, the available funding is finite, and in 2023, it was notably lower compared to previous years. The market data from S&P Global indicates that funding into global fintech companies dropped by 49% in the first half of 2023.

In an oversaturated market where so many companies are fighting over survival, to successfully complete an exit makes for a powerful symbol of success. However, it is not a simple task to accomplish. Whether the company’s efforts come to fruition depends greatly on how the leader thinks and what strategy they choose to emphasize.

So what does it take to successfully plan and execute an exit? As an entrepreneur and startup founder with several such cases in my portfolio, I would like to share some of the insights that helped me pull through and close deals over the years.

When should you start planning an exit strategy?

First things first, if we are talking about planning a startup exit strategy, it means that you have already assessed the potential buyers in your chosen market and are considering various scenarios that may influence the value of your startup in their eyes.

As more players seek to establish themselves, the competitive landscape grows that much fiercer. Meanwhile, the available funding is finite.

The most obvious influencing factor here is, of course, the product that you offer. If you are building a startup with the intention of selling it later on, then you should consider this from the get-go. Product selection heavily influences the creation and organization of an exit strategy for the business you will be doing because it helps you define ahead of time who your potential buyers will be.

In general, with a project of any size, you will need at least a year and a half to get some kind of tangible understanding of your product-market fit. From that point, you can start planning an exit strategy.

If you have previous exit experience to draw upon, you can also take it into account. Calculate how long it took you to achieve a particular valuation in the past, and you can roughly expect that your new business will achieve a higher value at double the speed.

What factors should go into consideration when preparing for an exit?

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