The Exit Playbook: 6 Battle-Tested Rules For Building Startups

From Startup to Sale: How Four Founders Built Companies Worth Buying

On the 23mile Podcast, we sat down with four founders who navigated successful multimillion-dollar exits: Yasen Dimitrov of Intelligence Node, Dan Schiffman of TVision Insights, Dhilon Solanki of Story Locker, and Edwina Sharrock of Birth Beat. Their stories reveal a playbook that goes against almost everything you hear about getting acquired.

Founder Bios

Yasen Dimitrov thought he had it made. His startup Intelligence Node was growing fast, they had a solid product, and potential acquirers were circling. But as he sat across from his tenth potential buyer, a Fortune 500 company called IPG, he realised something that would change everything about how he approached exits.

"If a big acquirer gets stuck on revenue growth for your startup, I would think twice," Yasen now says, reflecting on those gruelling months of negotiations. "They should not be acquiring you for the revenue. They should be acquiring you for the technology and for the know-how of the team."

It took 12 months, five offers, and countless sleepless nights, but Yasen eventually sold Intelligence Node to IPG for $100 million. His journey, along with three other founders who navigated successful exits, reveals a playbook that goes against almost everything you hear about getting acquired.

More Than Just “Life Changing Money 

Edwina Sharrock knew what she wanted before she even started looking for buyers. But it wasn't about becoming rich. It was about peace of mind, and knowing that the business she built will be in the right hands.

"It was the right number for me because I live a full and wonderful life and I don't have to worry about things and it's enough," she explains. Her company Birth Beat had successfully pivoted from a B2C model to B2B software licensing, landing major clients like Salesforce. The business was working, but Edwina had a clear vision of what success meant for her personally.

The breakthrough came through an unexpected source. A university friend who worked at the company that would eventually acquire Birth Beat. Her friend wanted Edwina to just have a conversation with them, but what sealed the deal wasn't the numbers. It was the people.

When Edwina met the CEO of the acquiring company, she felt instant chemistry. "He had this energy that was just felt around the whole office. I liked the culture of the organization and that was what really allowed me to think this could be a good fit." She needed to feel comfortable leaving her "baby" in their hands.

The Counter-Intuitive Path to Exit

Dan Schiffman's exit story breaks every rule in the startup playbook. He targeted a competitive market, exactly what most advisors tell you to avoid. His reasoning was that competition validates demand.

He says, "The reason I was able to exit this business was that there was a lot of competition in this sector”. "If there are no other players, there's a substantial risk that nobody's going to want to buy your business."

Dan's TVision Insights operated in the crowded TV analytics space, but that worked in his favour. Potential acquirers could see proven market demand and understand the value proposition immediately. Further, when the time came to sell, Dan made a crucial decision that many founders resist, getting external help.

"I hired a banker... to help me sell it and we got a great deal," he says. That money helped pay for business school and set him up for his next chapter. Dan got exactly what he wanted: an early exit that funded his MBA at MIT Sloan.

But even with professional help, deals fall through. Dan had an acquisition collapse while he was in business school, forcing him to run his company full-time while attending classes. The experience taught him that resilience, not brilliance, often determines who makes it across the finish line.

The Art of Knowing When to Quit

Dhilon Solanki's CRM company Story Locker seemed like an unlikely acquisition target. But it solved a specific problem for a mobile ordering platform trying to expand their product suite and crack the UK market. The key was understanding what the acquirer actually needed.

"Make sure that from day one... you've got your financials in order. Make sure you know your numbers," Dhilon advises. "If you aren't getting sales, no one will buy your business." The basics matter more than the fancy stuff.

Meanwhile, Edwina was learning a different lesson about focus. Despite launching a profitable new product, she killed it after just three months. Why? She didn't enjoy it. "You just gotta back yourself with, am I actually enjoying this?"

It seems counterintuitive to cut a profitable product line, but staying focused on what you love and do best often creates more value than chasing every opportunity.

It’s Okay to Ask for Help

Looking at Yasen's story again, his 12-year partnership with his co-founder became crucial during the IPG negotiations. Patience, both with each other and throughout the acquisition process, proved essential.

"I cannot recommend this enough," Yasen says about hiring bankers to manage the sale. "They take a lot of the emotion out of the deal." The process was exhausting. Multiple decision-makers at IPG meant endless meetings and revisions. Previous acquisition attempts had fallen through over the years.

But Yasen and his co-founder had built something IPG desperately needed which was the technology to "beef up their commerce offering" in a disrupting advertising industry. IPG wasn't buying Intelligence Node for its current revenue. They were buying the future capabilities and the team that could deliver them.

Want to hear the full stories directly from these founders? Check out the 23mile YouTube channel →

What Actually Matters

These four exits, reveal patterns that most startup advice gets wrong:

Rule #1 - Eyes on the Prize

Before you can sell your company, you need to define what a successful exit looks like for you. For some, it's about the number; for others, it's about the strategic fit. The key is to have a clear goal.

• For Edwina Sharrock, the exit was about securing a life-changing amount of money that offered peace of mind. "It was the right number for me because I live a full and wonderful life and I don't have to worry about things and it's enough".

• For Dan Schiffman, an early exit provided the capital to fund his next chapter. "That money helped pay for business school and put me in a solid spot".

• For Yasen Dimitrov, who sorted through 10 potential acquirers and five offers, the "prize" was finding a home with IPG, a Fortune 500 company that could help his company grow.

Rule #2 - Get the Basics Right

For a startup to be an attractive acquisition target, it must have trappings of a solid business. Before chasing a complex exit, master the fundamentals. Acquirers are looking for real, scalable businesses that solve a clear need.

This means:

• Building something customers want: "Find something the world needs. Find something you like and you're good at doing and make some money... it's that simple," says Sharrock. Her company, Birth Beat, successfully transitioned from a B2C model to a B2B software licensing business, landing major clients like Salesforce.

• Solving a problem for the acquirer: Buyers are often looking to fill a strategic gap. Dhilon Solanki's CRM product helped a mobile ordering platform expand its product suite and crack the UK market. Similarly, IPG acquired Yasen Dimitrov's company to "beef up their commerce offering" in a disrupting advertising industry.

• Knowing your numbers: "Make sure that from day one... you've got your financials in order. Make sure you know your numbers," advises Solanki. If you aren't getting sales, no one will buy your business.

Rule #3 - Use Counter-Intuitive Strategies

LSometimes, the path to a successful exit involves going against conventional wisdom.

• Choose competitive markets: Dan Schiffman argues that competition is a good thing. "The reason I was able to exit this business was that there was a lot of competition in this sector," he explains. A competitive landscape validates the market, signaling to potential buyers that it's a space worth investing in. If there are no other players, "there's a substantial risk that nobody's gonna wanna buy your business".

• Focus on tech, not just revenue: Yasen Dimitrov warns founders not to get bogged down by revenue metrics when talking to large acquirers. "If a big acquirer gets stuck on revenue growth for your startup, I would think twice," he says. "They should not be acquiring you for the revenue. They should be acquiring you for the technology and for the know-how of the team."

• Know when to cut your losses: Edwina Sharrock learned the power of focus after launching a new, profitable product. Despite its success, she cut it after just three months21. Why? It wasn't something she enjoyed. "You just gotta back yourself with, am I actually enjoying this?" Staying in her lane was crucial.

Rule #4 - Remember It's All About People

What makes an acquisition unique is that it isn’t just a financial transaction like a capital injection. It is a marriage of teams, cultures, and relationships.

• Cultural fit is crucial: When Edwina Sharrock met the CEO of the acquiring company, she felt an instant connection. "He had this energy that was just felt around the whole office," she recalls. "I liked the culture of the organisation and that was what really allowed me to think this could be a good fit." She needed to feel comfortable leaving her "baby" in their hands.

• Acquirers are buying your team: As host Kayode points out, "Even though they're buying the business, they're buying you as well". The management team is often expected to stay on for a transition period to ensure a smooth handover and hit earn-out targets.

• Co-founder relationships matter: Yasen Dimitrov, who worked with his co-founder for 12 years, highlights patience as the key ingredient for sustaining that relationship and for successfully negotiating a deal.

Rule #5 - Ask for Help

Exits are incredibly complex, and trying to handle one alone can be a recipe for disaster. Leveraging experts can take emotion out of the deal and lead to a better outcome.

• Both Dan Schiffman and Yasen Dimitrov hired bankers to help them manage their sales process. "I hired a banker... to help me sell it and we got a great deal," says Schiffman. Dimitrov strongly agrees: "I cannot recommend this enough... they take a lot of the emotion out of the deal".

• Sometimes help comes from unexpected places. Edwina Sharrock's life-changing exit came from a conversation with a friend from university who worked at the company that ultimately acquired hers. "She was like, I just think you should talk to them," Sharrock remembers.

Rule #6 - Adopt a Winner's Mindset

Finally, getting a deal over the finish line requires immense mental fortitude. The process is simple, but not easy.

• Be patient: Deals take time. For Yasen Dimitrov, it took a full 12 months from the first meeting to closing the deal, largely due to the number of decision-makers involved.

• Be resilient: Setbacks are inevitable. Previous acquisition approaches for Dimitrov's company had fallen through over the years. Dan Schiffman had a deal fall through while he was in business school, forcing him to run his company full-time while also attending classes at MIT Sloan.

• Back yourself: Ultimately, you must believe in the value of what you've built. As Edwina Sharrock puts it, "You've gotta really back yourself in terms of the value of what you can offer."

Exits don't happen to companies that need them. They happen to companies that deserve them and chase after them.

If you're building a company with an eye toward an exit, these six rules provide a powerful framework for success. By focusing on the fundamentals, embracing smart strategies, and cultivating a resilient mindset, you can build a company that is great in itself but also acquirable.

Follow 23mile podcast for more amazing gems on building, scaling and exiting world class organisations.

Stalled to Sold: Unlocking Liquidity in Under-Performing VC Portfolios

At the peak of ZIRP (zero interest rate period) in 2021, starting a VC fund was very popular and it was relatively easy for ex-founders, consultants etc to branch out and raise a first fund. Four years later and the situation could not be more different. Venture capital is going through an existential crisis as limited partners (LPs) retreat from further investments due to the lack of liquidity over the past few years.

To understand what the issue is for VCs and their LPs, let’s look at a hypothetical fund we will call Arise Fund, a 2018 vintage which is fully deployed as of December 2024. In its last LP report, Arise reported a net IRR of 8.4%, TVPI of 1.36x and DPI of 0.03x.

Out of the US$100 million fund, Arise has 80 million investable which it has fully deployed into 40 startups. Average first cheque is 1 million with half of the fund reserved for follow on funding.

If you’re an LP in this fund, the optics don’t look good at all. The General Partners have taken $12million in fees over the past 6 years and have managed to generate cash returns of $3 million.  When a manager like Arise returns to market to raise a successor fund, LPs will naturally be hesitant to commit to re-investing considering the performance of current fund. Unfortunately, the situation with Arise is in line with the average US-based VC fund according to Carta’s 2024 Q4 VC report. It is not an isolated case of bad performance.

So, it’s not surprising to see that LPs are instead ditching emerging managers to invest in more established VCs. In 2024, just 10 VC firms accounted for nearly half of all fundraising activity in the US, according to a 2025 outlook by UK asset management firm VenCap which invests in blue chip VCs globally. The lack of exits and liquidity to LPs is having a material impact on VC funds. Pitchbook’s Q1 2025 venture monitor shows that in 2024, ~600 US-based VC firms received commitments of $78 billion. This is down from a high of 1,700 firms receiving commitments of about $190 billion in 2022.

Given the current abysmal state of exits and financial performance of VC across board, what could be done to salvage the situation and ensure the asset class does not end up not being a giant cash bonfire? To figure out what options the GPs have, let’s look under the hood. What does the portfolio look like?

Fund Portfolio Analysis – Typical Power Law Distribution

Arise has invested ~80 million of investable funds into 40 portfolio companies over the past six years. The performance and status of its portfolio companies is just what you would expect from the average participant in a high-risk, high-reward endeavour that VC is. As at the last portfolio report in December 2024:

VC Portfolio Performance Breakdown

• Nearly half of the portfolio has failed while there’s been just a small exit which resulted in the meagre $3 million return to LPs

• 22.5% of the portfolio is currently struggling, some of these may still return some capital but it is not likely they will be able to stay afloat without some drastic improvement. These portfolio companies have not been able to raise follow-on rounds are hanging on by the skin of their teeth.

• Another 18% of the portfolio are trudging along just okay

• A combined 19% of the portfolio are doing okay to great and have been able to raise Series A and B rounds at some markup to their initial investment by Arise Fund. These two groups are responsible for the paper gains (TVPI) of the fund to date.

It’s the classic power law distribution, many have failed BUT there’s no assurance there will be a winner. Most venture capital funds aim to achieve a net return of 3.0x to investors over the life of their funds, typically 10 years. The accepted wisdom is that a very small fraction of portfolio companies, the outliers will be responsible for the entire results of the fund. For example, for a fund that invests an average of $2 million in each startup, a successful power law strategy is exiting just 1 of 40 companies at a 200x return. If this happens, it doesn’t matter what the situation is with the rest of the portfolio, the fund ends up being successful. The trouble is that achieving these power law outcomes are exceedingly rare, leading to the median VC fund not even returning 1.0x.

“Over 50% of funds raised between 2000 and 2014 had not returned 1x capital after 10 years” - David Clark, Vencap International CIO on 20VC with Harry Stebbings

Why is VC Performance so Poor Across Board?

One word – exits! Or rather lack of it.

VC Liquidity from 2014 to 2024

Net VC cash flow (funds returned to LPs minus funds raised from LPs) was positive between 2014 up till 2017 and has been negative since then except for 2020 when it was positive. This means LPs are cumulatively very deep in the red in the past five years.

One of the biggest challenges with running a venture fund is that the feedback loops are notoriously long. It takes 10 – 15 years to know if an investment decision is the right call, leading to outsized fund returns or the wrong one, leading to failure. Also, investing at the intersection of innovative technology and finance means VCs are susceptible to wild swings in both fields.

VCs today are dealing with the effect of steadily rising valuations in the decade from 2013, fuelled by low interest rates and intense competition between VCs. This reached a peak in 2021. Comparing Pitchbook-NVCA data over the period, median US seed pre money valuation increased 3x from $4 million in 2013 to about $12 million in 2023, while the median early-stage valuation (Series A + B) climbed 1.7x from about $22.9 million to $39.6 million over the same period.

VC Exit Activity

Though exit activity in 2024 reflected a modest increase from 2023, the 1,260 deals announced were just over 60% of the 2021 figure. Exit volumes of $158 billion was less than 20% of the 2021 high.

Currently, a cycle of doom seems to be in effect: startups cannot exit because of inflated valuations and macro‑economic uncertainty; the lack of exits hampers VCs’ ability to raise new funds, which leaves more startups under‑funded and prone to failure, further hurting VC performance and depressing exits even more.

What Can the Venture Capital Firms Do to Drive Exits?

VC View on Exits: Must Be Nurtured

Considering majority of acquisitions happen at early stages pre-Series B, it is not practical for startups to have in-house expertise such as an experienced CFO or investment banker to lead exit preparation.

VCs on the other hand have historically focused on the early part of the investing equation, picking “great companies” and then letting them be. This is starting to change as many VCs now realise that VCs are doomed without an industry-wide focus on exits and delivering liquidity to LPs. The problem is that apart from multi‑billion‑dollar giants such as a16z, Benchmark, Sequoia, Atomico and the likes, most VCs lack the in‑house resources to help portfolio companies prepare for and execute meaningful exits.

“In the last few months getting to an exit has been as hard as trying to raise funds.” – UK-based Corporate Venture Capital Investor.

Supporting portfolio companies is challenging because each startup’s circumstances differ and therefore require different interventions. The framework below simplifies the task by treating all companies as being at the same point, just before Series A, and by grouping them into two categories: “high‑fliers” and “strugglers”. In practice, a fund will hold startups at several stages.

23mile VC Portfolio Exit Framework

How would Arise Fund apply this framework to its portfolio? A structured approach would be

1.    Triage: classify the 24 surviving companies as either high-performers or strugglers. Another way to do this apart from the metrics approach in the framework is to classify by a) able to raise next round easily OR is cash flow positive b) all others

2.    Identify priorities: the needs of each group are vastly different. The top group needs a methodical, medium to long term M&A readiness approach. This ensures they are always well placed to achieve a great exit while they continue to scale the business. The “struggling” group needs more urgent attention – they need to stay alive and possibly sell for some sort of return.

3.    Allocate resources: should Arise buy or build the capabilities required to support exit needs of the portfolio? With a US$100 million fund, building a full M&A / corporate finance desk in-house is uneconomic, so Arise would most likely need to work with an external partner.

4.    Create and execute tailored action plans: High-flyers need to run a dual-track timetable. Keeping growth financing open while preparing for strategic sale. This plan requires targeted relationship building with corporate development teams, bankers and private equity funds. Strugglers need a decisive path: bridge financing, extensive cost cuts and/or bridge-to-fix and / or expedited sale.

5.    Quarterly review: the least disruptive approach is to integrate exit readiness KPIs into existing investor updates – at least for the top category. The strugglers may need a weekly / monthly update depending on how critical their runway situation is.

Unlocking Value from Struggling Portfolio Companies

VCs spend 80% of their time on “the losers". They should spend much more time on handful of winners instead. - Peter Thiel

Venture capital is and always will be about finding big wins. In a fund like Arise, seeking to improve its metrics in tail end of fund life, this will still be the case. As such, it will prioritise efforts on the handful of startups with potential to 10x or 100x their original investment. Let’s say they’ve identified four companies with this potential. What about the millions of dollars trapped in the other twenty? Write them off and leave them to die?

This is where 23mile steps in. We partner with VC funds to help portfolio companies transit from VC hyper-growth to profitability. This ensures good companies that are no longer “venture scale” stay alive and return some capital to investors. Our edge? A unique combination of fresh capital, restructuring support and medium-term exit support.

Get in touch to claim a free portfolio review.

23mile Facilitates $25 million acquisition of investment tech startup

FOR IMMEDIATE RELEASE

Leading US Bank Acquires Financial Modelling & Fundraising Platform for $25 million

New York, NY – April 1, 2025 – One of the largest listed banks in the United States announced today the acquisition of Caena, a pioneering fintech platform that simplifies fundraising for startups and small businesses. This strategic acquisition strengthens the bank's commitment to innovating venture financing and enhancing access to capital.

Caena.io has emerged as a leader by automating complex fundraising processes, offering tools for financial modeling, investor matching, and streamlined investor relations. With an existing network of over 8,000 startups primarily in the UK, Middle East, and Africa, Caena.io facilitates efficient connections between early-stage businesses and venture investors.

This fits into the bank’s existing Investor Connect. A digital platform designed to streamline the fundraising process by connecting startup founders with venture capital investors. The platform offers features such as facilitating investor introductions, creating virtual data rooms, and enabling secondary market trading of company shares

This acquisition follows the bank's earlier purchase of Aumni, a prominent data analytics provider serving startup investors. Both acquisitions underscore the bank's dedication to leveraging artificial intelligence and cutting-edge technology to support the growing entrepreneurial ecosystem.

Kayode Odeleye, founder and CEO of Caena.io, commented, "Joining such a prestigious financial institution marks an exciting chapter for Caena.io. Together, we'll amplify our mission to democratise access to capital and significantly enhance financial literacy among entrepreneurs globally."

The US$25 million consideration will be paid in a mix of cash and stock, subject to customary closing conditions and regulatory approvals.

* Further details on the identity of the acquiring bank will be provided later today once the market opens

About Caena.io Caena.io is a fintech platform that simplifies fundraising and investment management for startups, small businesses, and investment firms. Established in 2021, Caena.io streamlines deal sourcing, evaluation, and portfolio management through innovative digital solutions.

About 23mile 23mile is a turnaround fund for venture backed startups who need capital and support to transit from hypergrowth to profitability What makes us unique is the combination of capital, restructuring support and M&A advisory we offer. We also create a true partnership where we build long-term success for all stakeholders - founders, investors and employees.

Media Contact: Rachel Gorman
Head of Communications
info@23mile.com
+44 20 7946 0123