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From Startup to Exit: Necessary Leadership Adaptations - Bonar Institute for Purposeful Leadership

Each phase of a business’ life-cycle poses unique leadership challenges, and the Bonar Institute team can assist at each stage as coaches, mentors, and strategic advisors, and trainers. Senior executives need to adapt leadership practices and optimize the organizational structure for each phase of the business life cycle. Leadership challenges over the life-cycle include evolving needs for performance management, retaining key talent, succession planning, and maintaining positive relations with internal and external stakeholders – investors, customers, employees, and regulators. As the business increases in complexity around product development and legal and regulatory issues, the importance of professional management skills increases. Below is a figure that simplistically visualizes a startup’s life-cycle.

Startup & Initial Product Launch Phase: Founders self-fund the business and raise funds from friends, family, or angel investors in exchange for an equity stake. Leadership challenges include managing investors’ expectations and motivating team members to develop and launch the first product with limited resources. Performance management is ad hoc and succession planning is likely non-existent.

Growth or Scale Phase: At this stage, the initial product launch is successful and the focus shifts to increasing revenue by growing and scaling the business to attract more investment, for example, Series A, B, and C funding. Growth and scale can require different leadership skills. The increasing complexity of the business requires more focus on talent acquisition, performance management, and succession planning. The business’ founders might focus more on fund-raising whereas professional management will focus on operations. Leadership skills in optimizing the performance of teams are essential in this stage.

Expansion to New Customers and Markets: As the product and business mature, expansion into new markets with new customers requires alliances, joint ventures, partnerships, and licensing deals. Leadership challenges include finding the requisite legal, regulatory, and business expertise to manage complex relationships with multiple internal and external stakeholders. Some investors might want to liquidate their investments at this stage. Leadership will need to exercise skills to prepare the business for the exit stage.

Exit Stage: Many leadership challenges abound at the exit stage. An exit might entail raising more capital via an IPO or being acquired. Leaders will need to ensure that board members and officers with equity stakes in the business remain vigilant in exercising their duties of care and loyalty. Leaders will need to motivate talent that is essential to business success to not “cash out” their equity stakes and instead stay with the business. Company founders and key employees who remain with the business post-exit will need help adapting to their roles in the new organization.

What the Bonar Institute Offers: The Bonar Institute team consists of individuals with multinational business experience in all business lifecycle phases from startup to IPO. The Institute’s coaching, mentoring, and strategic advisory services assist leaders and teams in developing the necessary mindfulness and emotional intelligence skills to maintain individual, team, and organizational purpose.

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