I don't think elsewhere it's called an "exit strategy" to seek financing, be that IPO, Shark Tank, or the much more common and mundane options. I'm not even naively proposing that it's somehow bad to sell a profitable business in this way. I know selling a piece of your business involves diluting your control, but it is nearly always contractually required to not involve an "exit" (in terms of involvement) outside of tech. (Selling it wholesale does in any industry)
I'm just confused by two interlinked things. The terminology of "exit" and the implicit need for an "exit".
To me, the focus on "exit" does imply moving away from involvement with the business (in how the phrase sounds, and most importantly, in how it seems to be most often used). Which to me signifies a culture built around starting businesses and ultimately around becoming a VC yourself. Doing this is not notable, but presuming it is.
So either "exit" is any kind of large financing, and it doesn't involve "exit" in terms of involvement, in which case the term "exit" is strange to me.
Or "exit" is selling control and does imply "exit" in terms of involvement, in which case it's interesting that this is presumed to be the goal of starting a profitable business.
It seems in practice to be just jargon that covers both, but more the latter.
> I don't think elsewhere it's called an "exit strategy" to seek financing
I don't think that's how it is used in this context either.
A lot of early stage money in tech startups is there for the short(ish) term, and they definitely want to get their money out (i.e. "exit") at some point, not build a business over decades.
It's their usage of "exit", and the need to have a strategy for it, which drives the usage more broadly, I think. Agree it can be a bit confusing by confounding the above needs.
Right, it's the focus on "exit" also for founders (who also run the business) that puzzles me.
As for the "exit=financing" association, I made that based on your comment:
> > It's a jargon term not used in the entrepreneurial side of most other industries.
> That's because in most of the industries you are thinking of, you can get traditional financing.
> The need for an exit of some sort follows from the financial structure.
But I think I misunderstood and you were saying something more like that the lack of traditional financing leads to a form of financing that necessitates selling the business wholesale.
Re founders there is a tension: They often want to both maintain control (i.e. equity) and realize some $$ from building the company. A liquidity event of some sort is often seen as the best way to do this, especially if they've been lean on salary for a decade at that point, which is often the case.
That's because in most of the industries you are thinking of, you can get traditional financing.
The need for an exit of some sort follows from the financial structure.