Selling a company is not a betrayal: The perspective of whether an exit actually exists

Things arbitrarily attached to the word "sale"

In Japan, selling a company carries a unique emotional weight. Having let it go, given up, run away, abandoned it, converted it into cash. The premise that a founder should hold onto their company until death is shared everywhere, even though it is written nowhere.

Rather than improving management, this premise only delays decision-making. People even feel guilty about considering a sale, years pass without any such consideration, and before they know it, the business is no longer in a condition where it can be sold.

In a business with no way out, the management is the first to freeze up.

A business without an envisioned exit becomes a business you cannot quit. People who cannot quit cannot try new things, because they have nowhere to return to when they fail.

As a result, that executive ends up continuing to make the most conservative choices. While it looks like they are protecting things, in reality, they are closing off a bit of the space of possibilities every year.

When a state of immobility continues for a long time, the criteria for judgment also change. You stop thinking about what to do to grow, and start thinking about what not to do to avoid breaking down.

Employees are on a boat they cannot get off of.

In a company with no exit, the employees' options are narrowed at the same time. Because their value is not communicated in a way that extends outside the company, leaving it resets their evaluation to zero.

The loyalty of someone who cannot leave is not loyalty. It's just calling a state of immobility by another name.

Conversely, a company that retains people who could easily succeed outside is strong. This is because staying is a matter of choice, not resignation.

the idea of the reality of exits

One of the metrics I place high importance on when making investment or support decisions is whether the people involved can make their own decisions, change direction, and walk away if necessary. I call this the reality of the exit.

If an exit actually exists, the choice to remain there becomes a true choice for the first time. A place where you can choose to stay again and a place where you have no choice but to stay look the same from the outside, but their substance is entirely different.

Designing the exit improves the business itself

The process of making a business ready for sale is, in itself, the process of putting the management in order. It means reducing reliance on individuals, making numbers accountable, verifying contracts and rights, and establishing a system that can be run by anyone who takes over.

Even if they don't sell, a company that goes through this process is strong. Designing the exit is both preparation for a sale and a health check for the business.

Even who to hand it over to is included in the design.

Having an exit is different from being allowed to hand it off anywhere. Every business has accumulated the time of the people who have been involved with it. Only when you determine to which coordinates that time will be placed next does the design finally come to an end.

An exit is not made for the end.

Its value lies in serving as a mechanism to ensure that everyone involved can always make a fresh choice.

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