What is an exit?
An exit is how founders and investors realise financial returns from a startup, typically through an IPO (public listing) or a merger or acquisition.
Why are exits important?
Exits are critical. They recycle capital, build experienced founders and investors, and support the next generation of startups through flow of capital. Without strong exit outcomes, that cycle slows.
New research from KPMG High Growth Ventures highlights that while exit activity is expected to increase, there is a clear gap between founder expectations and readiness.
Only 37% of founders report being exit-ready today, yet many believe they could be ready within 6–12 months. KPMG’s The Exit Readiness Gap 2026 report shows that readiness typically takes one to three years of sustained preparation, plus a lengthy transaction process, revealing a clear mismatch between expectation and reality.
Three in four founders surveyed reported that poor preparation slows deals and weakens pricing power, with some estimating it can reduce company value by more than half. Despite this, exit planning is still not consistently embedded into company strategy or discussed regularly at the executive and board level.
The report highlights that this gap is not driven by a lack of awareness, but by how exits are prioritised during the growth and scale stages. While founders are focused on expanding and capital raising, exit readiness (including financial assiduity, legal structure, governance and tax planning) is treated as an afterthought.
When opportunities arise, these gaps become critical to a successful exit. Buyers are increasingly selective and issues in these key areas can quickly erode confidence to delay or derail a deal.
How can founders prepare for an exit?
To achieve stronger outcomes, the report recommends founders embed exit strategy earlier in the startup journey and treat readiness as part of building the business, not just when preparing to sell.
This includes:
- Start exit planning well before a buyer appears
- Make exit strategy a regular, non-taboo discussion point
- Strengthen financial, legal and governance foundations early
- Understand different exit pathways and what they will require
- Build relationships with potential acquirers over time
These actions will improve exit outcomes while strengthening Victoria’s startup ecosystem. Embedding exit readiness earlier in company strategy will enable more efficient capital recycling and better position the next generation of founders to launch and scale.