You can tell how a company is going to exit months, sometimes years, before it happens.
It shows up in behaviour, not numbers.
In the companies that exit well, people are still arguing about the roadmap. They are still taking customer complaints personally. Someone is still quietly pushing back on a bad deal because the margin structure is wrong. The business is being run.
In the companies that don’t, the arguments have stopped. The conversations have tightened. People are waiting. You can feel the shift the moment leadership decides the company is an asset to be sold rather than a business to be built.
I’ve been through four exits across different markets and decades. What I’m more certain of now than I was ten years ago: the companies that exit best are the ones that stopped thinking about the exit first.
One of them is my clearest cautionary tale. A business had been sold to a large security player at the peak of the dot-com boom. When the bubble burst, the original investors bought the assets back and put a new company together. The thesis was a quick onsale. It didn’t happen, and it didn’t happen because nobody was running a company. They were running a sale process that had no buyer.
The signs were everywhere. No investment in the organisation. No investment in IT. No investment in anything operational. Customer satisfaction was low because customers were an afterthought. Why invest in the relationship if we were leaving in eighteen months? At one point the company sued a major customer for IP infringement because the customer was under-licensed. A good operator would have walked in, fixed the licensing, and turned it into a larger contract. The business took the million and the lawsuit, because a million in the bank would look better in the data room than a healthy long-term customer.
That is what a company run for exit actually looks like. Short-term cash over long-term relationships. Feature freezes dressed up as focus. Channel partners neglected because they don’t show up in this quarter’s numbers. And underneath all of it, a culture where good people start to behave badly because the signal from the top is that nothing matters except the transaction.
It took a new team, a reset of the operating model, and several years of rebuilding before the investors got their money back. Not the quick exit. The long one.
Apertio was the opposite case. We built a product, established a new market category, and ran the company as if we were going to own it forever. We were deep into exploring IPO options because the plan was to stay independent.
At Mobile World Congress one year, a journalist was interviewing me about the Apertio story and clearly didn’t believe any of it. He thought I was making it up. I paused and asked him what would convince him. He said a customer telling him it was true. I asked him to wait, walked into the next meeting room, and came back in with the Global CTO of T-Mobile. “This do?” I asked.
That was the company we had built. Customers who would walk across a conference to vouch for us. Tier 1 telcos who picked up the phone. A product so obviously winning in the market that a journalist’s disbelief was the most honest reaction we got that week.
Nokia came to us because their commercial teams could tell, in real time, that they were losing every deal where Apertio showed up. The acquisition was defensive. They bought us because they couldn’t beat us, and because an IPO would have put us permanently out of reach. We weren’t positioning for an exit. We were positioning to win. Apertio went on to become the core of Nokia’s network business.
That is the pattern that actually repeats. Not a clean data room. Not a rehearsed equity story. A company so clearly winning that a buyer concludes it is cheaper to own you than to compete with you.
The practical version of this for PE sponsors and board chairs is a question, not a checklist. Are you pushing your portfolio company to build the business, or to stage it? One of those produces exits. The other produces lawsuits, churn, and write-downs dressed up as strategic decisions.
You can usually tell which one is happening by listening to what the employees are arguing about.