On a recent episode of “No Priors,” the excellent podcast co-hosted by AI investors Sarah Guo and Elad Gil, Gil highlighted the exit moment that is no doubt familiar to founders who have spent time with it, but which seems particularly useful in this time of go-go trading.
For most companies, Gil said, there is about a 12-month period in which the business peaks, “and then it crashes.” The companies that capture generational returns are often the ones where someone spies on that moment rather than assuming that the good times will be even better. Lotus, AOL and Mark Cuban’s Broadcast.com were sold at or near the top, and Gil views them all as companies that foresaw what was coming and smartly pulled the ripcord.
To take advantage of that window, Gil offered a practical suggestion: pre-schedule a board meeting once or twice a year specifically to discuss exits. If it’s a permanent calendar item, take emotion out of the equation.
This is more important now than it was a few years ago. Many AI startups exist in part because basic models have not yet expanded into their category. But as many founders, like Deel CEO Alex Bouaziz, have begun to jokingly acknowledge, that won’t last forever.
As Gil said: “As you see changes in differentiation and defense and everything else, it’s a good time to ask, ‘Hey, is this my time? Are these next six months going to be the most valuable I’ll ever be?'”
