Ringing the bell on Wall Street may be every founder’s dream, but only a tiny fraction ever get the chance. According to PitchBook, initial public offerings (IPOs) accounted for only 3.8% of all U.S. venture-backed exits between 2023 and 2025 YTD, which is a historic low, while mergers and acquisitions dominated with 73.7% of those exits.[1] The chill began after the 2021 peak, when exits hit 2,047 deals valued at $916.6 billion, only to plunge to 1,170 deals valued at $117.1 billion by 2023.[2] So founders who understand their exit paths can plan smarter, negotiate better, and capture greater value.
Let’s dig into 10 realistic options for exiting a startup, illustrated with real‑world examples and practical insights.
1. Acqui-hire: Talent Over Product
Acqui-hires are essentially human-focused acquisitions. Instead of shutting down, your company is acquired mainly for its people and not to buy your company outright. Your product or service is often shelved or quietly integrated post-close. These acquisitions may not be headline-grabbing deals that result in huge financial windfalls, but for struggling startups, it can be a graceful landing. Here, the valuation is tied to retention packages and incentives to maintain the team post-close. Almost 90% of U.S. venture-backed exits in 2024 involved companies at Series B or earlier stages, reflecting that most recent exits were likely small and included lots of acqui-hires.[3] Many acqui-hires go unannounced or have undisclosed terms.
Example: Meta/Facebook famously acqui-hired multiple early-stage teams, including the team behind Beluga, which later became Facebook Messenger. Google and Apple have done dozens of these deals to quietly absorb talented engineers.
Typical Timeline: Any point in a startup’s life cycle but typically at Series B or earlier.
Best Suited For: Teams with strong technical chops, even if the product didn’t quite hit.
2. Asset Sale: Selling the Pieces
When a company is unable to scale but owns valuable intellectual property (IP), customer lists, or technology, an asset sale can be a last-resort cash-out. In an asset sale, only the valuable pieces of the startup are sold to the buyer. Asset sales tend to occur when the startup can’t continue independently and often occur after a company fails to raise another round or faces other financial headwinds, such as during market downturns. These deals are rarely lucrative for founders, but are often better for stakeholders than walking away empty-handed.
Example: The remains of Quibi, the short-form video platform, were sold to Roku for less than $100 million. Most of the value came from content licensing rights.
Typical Timeline: Any point in a startup’s life cycle.
Best Suited For: Startups that have built a great product or service but are out of runway and hope to recover some value.
3. Secondary Sale: Partial Liquidity, No Full Exit
Secondary sales let founders, employees, and early investors realize some liquidity before the company fully exits. Late-stage startups increasingly rely on secondary sales to ease cash-out pressure and reward early investors and employees without forcing an IPO or acquisition. Secondary transactions range from one-off sales (e.g., a founder selling a portion of his or her stock to one buyer) to broad-based tender offers that invite many stockholders to sell their stock.
Tender offers are governed by U.S. securities laws. Although there is no brightline rule for what constitutes a tender offer,[4] counsel may view outreach to roughly a dozen or more stockholders as potentially triggering a tender offer, even if no price or terms are discussed. Once a secondary sale is in tender-offer territory, the deal must satisfy specific rules and established practices shaped by the antifraud provisions, such as keeping the offer open for at least 20 business days and providing disclosure documents to solicited stockholders.
By offering partial liquidity in a structured manner, startups can retain talent and postpone a public exit.
Example: High-growth startups, such as Airbnb, Palantir, and Stripe, have famously used secondary programs to provide pre-IPO liquidity, enabling their employees to sell shares privately years before their IPOs.
Typical Timeline: Series A or later for one-off secondaries; post–Series B for tender offers.
Best Suited For: Founders seeking partial liquidity for themselves, their employees, or early investors without pursuing an IPO or sale of their startup, and well-capitalized startups that do not need additional capital to extend the runway.
4. Bankruptcies and Shutting Down: Unicorpses and Strategic Sunsets
Not every story ends with a champagne toast. When shutting down is the best option, a well-managed soft landing can help preserve your team’s dignity and professional reputation. This may involve placing the company’s IP or team with another business, even if there’s no payout. Where there are sufficient assets, the shutdown can be completed under court supervision through a Chapter 7 bankruptcy, in which a court-appointed trustee sells the company’s assets and distributes the proceeds to creditors in the order determined by applicable law. However, in many cases, failing companies lack sufficient assets to undergo a court-supervised bankruptcy. Instead, many companies dissolve outside of the courtroom and without the protections bankruptcy provides.
Example: In 2024, Moxion, the cleantech portable battery company, shut down through a Chapter 7 bankruptcy after raising $100 million in 2022.[5]
Typical Timeline: A company can shut down at any point in its life cycle. Court-supervised bankruptcies typically require sufficient funds to administer and are more common among post–Series B companies.
Best Suited For: Bankruptcies are best suited for companies with sufficient funds to cover the bankruptcy process, significant or complex liabilities, and the need for protection from creditors. Shutting down outside of bankruptcy is best suited for startups that lack sufficient funds to fund the bankruptcy process, cannot scale or achieve profitability, and seek to preserve team morale and maintain positive investor relationships.
5. Assignment for the Benefit of Creditors (ABC Sales)
An ABC sale is a way of liquidating a business in which a distressed company voluntarily assigns all of its assets to an independent fiduciary, or “assignee,” for the benefit of the company’s creditors. The assignee then sells those assets and distributes the proceeds to creditors in the order determined by applicable law. Depending on the state law governing the sale, there can be minimal or no court involvement. This means the process is considerably faster, less expensive, and subject to far less public and judicial oversight than a court-supervised bankruptcy. As a result, boards and investors can more easily manage timing, confidentiality, and liability risk.
Typical Timeline: Any point in a startup’s life cycle.
Best Suited For: Startups whose principal value lies in intellectual property (not physical assets) and whose cash runway no longer supports continued operations.
6. Mergers and Acquisitions (Strategic): The High-Payout Dream
Strategic M&A occurs when a larger company acquires yours to strengthen its position in the market, whether it’s for your customers, technology, or competitive moat. These exits frequently offer the highest payouts.
Example: Adobe’s $20 billion acquisition offer for Figma in 2022 stunned the tech world. The strategic fit was obvious: Adobe saw Figma as both a threat and a growth opportunity.
Typical Timeline: Any point in a startup’s life cycle.
Best Suited For: Startups with strong brand, customer base, or strategic IP.
7. Private Equity Standalone Buyout: Single Business Recap
In a stand-alone buyout, a private equity (PE) firm acquires a mature startup that’s already generating steady cash flow with clear financial visibility. The startup is valued based on its own fundamentals as a self-contained business and generally left intact. In these exits, the PE firm plans to run the standalone business and not necessarily build a portfolio around it. The deal thesis is based on the company’s own revenue, rather than on synergies with a group of other companies. The PE firm usually recapitalizes the balance sheet by acquiring significant debt to finance the acquisition. They typically plan to hold the business for three to seven years before exiting themselves. These deals can offer solid returns for mature companies. Many employees retain their roles, because the financial buyer needs the existing team to keep the company operating so that it can service its debt and increase in value. Many employees (and often the founders) will remain to operate the company, since the financial buyer may not have expertise in the startup’s industry and doesn’t typically bring a whole operating team of their own. Post-closing, the management team should expect tougher KPIs and aggressive cost cuts to increase margins.
Example: InVisionApp was acquired by a PE firm after years of struggling to scale further. The acquisition offered a path forward for the founders and their investors.
Typical Timeline: Post–Series B
Best Suited For: Growth‑stage startups that are no longer achieving “hockey‑stick” expansion but generate durable, consistent revenue and want founder or early‑investor liquidity without the scrutiny of public markets. The founders and key executives should be comfortable continuing to work under private equity management.
Private Equity Roll-up Strategy: Scaling Through Aggregation
In a roll-up, the PE firm first bets on a “platform” company. Thereafter, that platform company systematically acquires smaller competitors to build a larger, integrated entity with the goal of scaling the combined entity for a subsequent sale or IPO. Unlike standalone buyouts, roll-up exits value your startup based on the value of the future combined entity. Synergies, integration speed, and leverage-driven financial engineering (as opposed to each target’s standalone metrics) drive the model. To reduce costs and increase margins, redundant roles are cut, pricing is harmonized, and corporate functions (e.g., legal, HR, finance, marketing) are centralized. Founders and other key executives often roll over some of their equity, obtaining a stake in the larger combined entity, instead of cashing out entirely. Post-closing, the management team should expect KPIs that are harder to meet and aggressive cost cuts, including headcount reductions.
Example: Vista Equity has acquired numerous software as a service businesses, often streamlining operations and flipping them years later for profit.
Typical Timeline: Post–Series Seed where the startup fits into a clear thematic roll-up. However, the platform company is typically post–Series B.
Best Suited For: Startups with solid revenue and clean cap tables (few complications in ownership), and whose tech or customer base plugs in neatly to a larger platform. The founders and key executives should be comfortable continuing with the combined entity.
9. De-SPAC (Combination With a SPAC): The Shortcut to Public Markets
SPACs (special purpose acquisition companies) are blank-check companies formed and funded for the purpose of acquiring a startup and then taking it public via merger. While once all the rage, the shine of SPACs has worn off somewhat due to regulatory scrutiny and high redemption rates.
Example: Opendoor went public via a SPAC backed by Chamath Palihapitiya, raising $1 billion. But like many SPACs, it later faced volatility and valuation challenges.
Typical Timeline: Post–Series A
Best Suited For: Mid-to-late-stage companies looking for faster liquidity than a traditional IPO.
10. IPO: Riding the Rocket Ship and Ringing the Bell
Going public is the most visible and prestigious exit, but also the most expensive, lengthy, highly scrutinized, and heavily regulated. Fewer than 1% of successful startups make it this far, and even fewer sustain long-term success as public companies. Only about 3.8% of VC-backed exits so far in 2025 were public listings, a historic low. By contrast, acquisitions now make up 74% of exits, the highest share in years, as startups find M&A to be the most viable liquidity path. This emphasizes how founders today mostly exit via acquisitions rather than IPOs.
Example: Snowflake’s 2020 IPO raised $3.4 billion, which at the time was the largest software IPO in history. But it came after a decade of patient growth and careful planning. In July 2025, Figma went public, with its share price popping 250% on its first trading day. Its fully diluted market cap of $47.9 billion by day’s end was almost twice the valuation set by Adobe when it attempted to acquire Figma in 2022, underscoring the potential upside of a successful IPO.[6]
Typical Timeline: Post–Series B
Best Suited For: High-growth startups with massive market potential, a compelling story, and strong financials.
Final Thoughts: Know Your Options
There’s no one-size-fits-all exit path. The “best” outcome depends on the goals of your team and investors, your market position, and timing. Whether you’re dreaming of ringing the bell on Wall Street or simply aiming to land the plane safely, staying informed about your options can help you navigate the journey with more clarity and less stress.
Pro Tip: Start planning early. Even at the seed stage, the type of exit you’re aiming for can influence how you build, fund, and lead your company.
Reach out: Want to talk exit planning, startup legal issues, or liquidity options? We love helping founders think through the journey from build to exit.
[1] PitchBook’s 2025 U.S. Venture Capital Outlook.
[2] PitchBook’s Q2 2025 NVCA Venture Monitor.
[3] Pitchbook’s Q4 2024 Venture Monitor.
[4] Whether a secondary transaction is considered a tender offer is a facts-and-circumstances analysis that considers, among other factors, whether: (i) the purchase price represents a premium over the prevailing market price, (ii) the offer is contingent upon the tender of a fixed number of shares, (iii) the offer is for a limited time or could be left open indefinitely, (iv) sellers/transferors are under any pressure to exchange their securities, (v) the buyer is accumulating the issuer’s stock, (vi) the buyer is making a public announcement of its offer, (vii) the number of persons solicited (i.e., constituting an “active and widespread solicitation”), and (viii) the terms of the exchange are negotiable.
[5] https://www.latitudemedia.com/news/portable-battery-startup-moxion-is-bankrupt-what-happened/.
[6] https://pitchbook.com/news/articles/figma-ipo-pop-spotlight-underwriter-pricing?utm_medium=newsletter&utm_source=daily_pitch&sourceType=NEWSLETTER.