The 12 month window | TechCrunch

Brief

In a recent episode of “No Priors” – the excellent podcast co-hosted by AI investors Sarah Guo and Elad Gil – Gil made a point about exit timing that is no doubt familiar to founders who have spent time with him, but which seems particularly useful in this moment of go-go trading.

For most businesses, Gil said, there is a period of about 12 months where the business hits its peak value, “and then it collapses.” Companies that capture generational returns are often the ones where someone is spying on this moment instead of assuming that good times will get even better. Lotus, AOL and Mark Cuban’s Broadcast.com all sold at or near the top, and all are touted by Gil as outfits that foresaw what was coming and smartly pulled the rip cord.

To take advantage of this window, Gil offered a practical suggestion: schedule in advance a board meeting once or twice a year specifically to discuss exits. If it’s a permanent fixture on the calendar, it takes emotion out of the equation.

This is more important today than a few years ago. Many AI startups exist in part because the basic models have not yet expanded to their category. But as many founders — like Deel CEO Alex Bouaziz — have begun to jokingly acknowledge, that won’t last forever.

As Gil says: “As you see, the change[s] when it comes to differentiation and defensibility and everything else, it’s a good time to ask, “Hey, is this my time?” Are these the next six months where I’m going to be the most valuable I’ll ever be?’

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