In a recent episode of “No Priors,” a great podcast co-hosted by AI investors Sarah Guo and Elad Gil, Gil pointed out something about exit timing that is no doubt familiar to founders he spends time with, but seems especially useful in the moment of ongoing trading.
Gil says most companies reach peak business value and then collapse about 12 months later. Companies that capture generational returns are often the ones that have someone spying on the good times, instead of assuming they will get better. Lotus, AOL and Mark Cuban’s Broadcast.com all sold at or near the top, all of which Gil kept in an outfit that foresaw what was coming and wisely pulled the ripcord.
To seize that opportunity, Gil offered a practical suggestion. Specifically, it means scheduling a board meeting once or twice a year in advance to discuss leaving the company. If it’s a standing calendar item, take emotions out of the equation.
This is more important now than it was a few years ago. One of the reasons so many AI startups exist is because the underlying model has not yet expanded into the category. But as many founders, like Deel CEO Alex Bouaziz, have begun to jokingly admit, this won’t last forever.
As Gil said: “When you see changes in differentiation and defenses and everything else, it’s a good time to ask, ‘Hey, is this my moment? Are the next six months going to be the most valuable months I can be?'”
