Andy Nurumov

Author: Andrew Nurumov

Investors always want results. For PE/VC it is successful exit, for all others – P&L/Capitalization objective. The last one also allows to make successful exit if it is necessary. Therefore successful exit should be main objective to provide alignment between CEO’s and shareholders’ long term interests.

What does such alignment further provide?

1. Reinforce only right activity. CEO’s task is to transfer the following philosophy to employees – that they also should act in shareholders’ interests. Almost nobody explicitly communicates it, but it is a powerful instrument. It allows right resolution of debate / conflict situations inside company and focus on gist in activities and execution.

2. Right decisions at every open question. For example, founders think about necessity of Corporate Agreement at first months of company existence. But how is successful exit possible in many scenarios without a such contract? Right long-term approach and there is no dilemma. Only right actions.

3. It allows to eliminate actions that are not necessary. Very often in crisis situations / or at start founders could accept unwelcome outcomes that deteriorate long term business stability. Objectively, knowing the ending outcome allows to eliminate wrong paths in company development.

CEO consistently should ask yourself: “Are I doing everything right with regard to exit strategy and what can I do next?”. Sometimes persistence of the question could drive a response for next action.