The 12-month window | TechCrunch

On 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 at this moment of dealmaking.

For most companies, Gil says, there is about a 12-month period when the business is at its peak, “and then it collapses.” The companies that see generational gains are often the ones where someone spies that moment rather than assuming the good times will get better. Lotus, AOL, and Mark Cuban’s Broadcast.com are all selling at or near the top, and all are presented by Gil as outfits that foresaw what was coming and smartly pulled the cord.

To take advantage of that window, Gil made a practical suggestion: schedule a board meeting in advance once or twice a year specifically to discuss exits. If it’s a regular agenda item, emotion is taken out of the equation.

This is more important now than it was a few years ago. Many AI startups exist, in part because the basic models have not yet expanded into their categories. But as many founders – like Deel CEO Alex Bouaziz – are starting to jokingly acknowledge, that won’t last forever.

As Gil put it: “The way you see change[s] in terms of differentiation and defensibility and all the rest, it’s a good time to ask, ‘Hey, is this my moment? Is this the next six months where I’m going to be the most valuable I’ll ever be?'”