Ghada Ismail

When you're in the initial stages of launching a startup—raising money, acquiring users, building product-market fit—thinking about an exit seems too early. But experienced founders know that from the very start, you build not just for expansion, but for a potential finish line.

An exit strategy is your strategy for how you and your investors will ultimately cash out of the business. It determines how stakeholders will harvest the value they've helped create, either by selling the firm, merging with another company, going public, or even closing down.

Let's break down what an exit strategy is, why it's important, and what alternatives startups usually consider.

Why Startups Require Exit Strategies

An exit strategy is not quitting; it's preparing for the transition that is needed. No business is ever a startup forever. Whether your company succeeds, pivots, or tanks, every business trajectory will eventually reach a fork in the road.

what comes next is why it is so essential to have an exit strategy:

•Investor Expectations: Venture capitalists invest with an expectation of return, usually through exits like acquisitions or IPOs.

• Strategic Planning: Having a potential endpoint in mind informs your business decisions along the way.

• Founder Goals: Some founders envision a legacy company, whereas others plan for exit after 5-7 years. Both are doable but necessitate different strategies.

• Risk Management: Exit planning prepares for market downturns or challenges internally before they get out of hand.

Common Types of Startup Exit Strategies

1. Acquisition

An acquisition happens when a larger company buys your startup, either for your product, your team, or your users, or all three.

An acquisition provides liquidity and can be quicker than an IPO. Ex: Facebook buying Instagram.

It is best for startups with differentiated tech, strong growth, or strategic value to larger players.

2. Initial Public Offering (IPO)

Going public via an exchange listing is considered the "final" exit. It has the added benefits of raising funds, increasing visibility, and providing liquidity for investors.

IPOs are rare because they are expensive, heavily regulated, and suitable only for established startups with strong financials.

IPOs are best for high-growth startups in large markets, especially ones with global ambitions.

3. Merger

A merger combines your startup with a different company, typically to share resources, grow faster, or be able to compete more effectively.

It may allow startups to exist in challenging markets or expand better. It works best for startups that desire to benefit from a different firm's capabilities.

4. Management Buyout (MBO)

In an MBO, your firm is purchased by internal parties, generally high-level employees or current executives.

It keeps the company's culture intact and compensates the core team from within.

MBOs are ideal for startups with devoted leadership teams and no external investors anticipating enormous returns.

5. Shutting Down 

Not all exits are glamorous. Sometimes the wisest thing to do is an orderly shut-down; returning outstanding capital, paying off obligations, and closing neatly.

Why it's important: Dying startups can also exit in style, preserving founder reputations and investor relationships.

They work best for startups that can't scale or pivot successfully.

How to Select the Best Exit Strategy?

There is no one-size-fits-all path. The ideal exit strategy will depend on your intentions, your investors' timelines, your market, and your business model.

Below are some questions to guide you:

• Are you creating to sell or to remain?

• What degree of control do you desire over your company long-term?

• How long do you want to remain involved after exit?

• Are your investors requiring a timeline or a specific type of return?

Talking about it upfront—both internally and to investors—can get everyone aligned and eliminate conflict down the road.

When Should You Start Thinking About Exits?

Ideally, before you raise your first Riyal. Exit planning should be on your to-do list from the day you start raising capital or even conceiving your growth strategy.

Even though you don't have an established deadline or guaranteed result, having a direction where you're heading keeps decisions regarding hiring, product development, and investor relations aligned.

The earlier you begin contemplating your exit, the more on your terms you'll be in control of it.

Wrapping things up…

An exit strategy does not mean you're going to exit, but planning in advance. If your desire is to be acquired, merge with a strategic business partner, or develop a sustainable business that can continue without you, knowing how your journey may shift impacts how you build today.

Startups are volatile. But having clarity around your long-term vision gives you and your stakeholders the direction you need to make better decisions, grow on purpose, and exit on your terms.

Noha Gad

The startup world is witnessing a quiet revolution. While venture capital and bootstrapping dominate headlines, a lesser-known model, search funds, has been delivering outsized results for founders and investors alike. 

Unlike traditional venture capital, search funds empower founders to acquire and scale existing companies with investor-backed capital and mentorship, significantly de-risking the entrepreneurial journey. But why are search funds gaining traction, and how can they transform your startup’s future? 

What are search funds?

Search funds are an innovative investment model where aspiring entrepreneurs (called "searchers") raise capital from investors to systematically acquire and operate an existing small-to-midsize business. 

The process comprises two phases: first, the searcher raises an initial "search fund" (typically ranging between $500,000 to $1 million) to cover 12–24 months of operational costs while identifying and evaluating potential acquisition targets. They analyze hundreds of businesses, leveraging investor networks and industry expertise to find undervalued companies with strong growth potential.

Once a searcher identifies and acquires a target business, the operational transformation phase begins. In this phase, the searcher steps in as CEO, using additional investor capital and mentorship to scale the business.

This stage plays a critical role in de-risking entrepreneurship as it helps searchers avoid the 90% failure rate of early-stage startups by building on a proven foundation. Additionally, it increases the investor's return on investment (ROI) by 4.5 times.

Why do search funds matter?

Unlike traditional venture capital, search funds focus on proven businesses, offering a unique blend of entrepreneurial opportunity and reduced risk. Investors, often high-net-worth individuals or institutional players, provide not just capital but hands-on guidance, forming a partnership with the searcher. 

This symbiotic approach has made search funds particularly attractive for founders seeking a "middle path", avoiding the grind of starting from scratch while sidestepping the equity dilution common in VC-backed startups.

Why are search funds critical for startups?

Search funds offer various benefits for startups, such as:

• Access to capital without extreme dilution. Search funds enable searchers to raise acquisition capital without giving up ownership upfront.
• Built-in traction and market validation. Search funds target already revenue-generating companies with existing customers, eliminating guesswork.
• Accelerated growth with expert backing. Unlike passive VC investors, search fund backers often provide industry-specific mentorship.
• Risk mitigation in volatile markets. Search funds usually target recession-proof sectors, such as B2B services, healthcare, and IT.

How to leverage search funds?

Search funds provide a unique opportunity for ambitious operators to acquire and scale established businesses while mitigating startup risks. Entrepreneurs should focus on securing investors with industry expertise, targeting stable companies in recession-resistant sectors, and executing post-acquisition growth through operational improvements and strategic add-ons. 

On the other hand, investors must focus on sector expertise and aligning incentives to capitalize on search funds’ unique advantages: lower risk than traditional VC, higher involvement than PE, and typical returns upon exit.

Finally, search funds represent a transformative model that provides entrepreneurs a proven path to leadership without the volatility of starting from scratch. Meanwhile, these funds offer investors a hands-on, high-reward asset class grounded in real businesses. By merging operational expertise with strategic capital, this model transforms undervalued companies into growth engines while producing exceptional returns. 

Noha Gad

The world’s population is expected to surpass 10 billion by 2050, creating an urgent need to increase food production by nearly 70% to meet growing demands. However, this challenge is compounded by shrinking arable land, limited water resources, and the unpredictable effects of climate change.

Traditional farming methods are no longer sufficient to address these challenges sustainably. This is where artificial intelligence (AI) steps in as a game-changer. By leveraging advanced technologies like machine learning, predictive analytics, and automation, AI has the potential to revolutionize agriculture, helping farmers produce more with fewer resources, reduce waste, and adapt to changing environmental conditions. 

Technology, particularly advanced tools like AI, IoT devices, and precision farming techniques, offers powerful solutions to these challenges. These tools provide smarter resource management, real-time monitoring, and predictive decision-making, empowering farmers to increase efficiency and create a more sustainable agricultural system. 

What is agricultural technology?

Agricultural technology (agritech) is the use of innovative tools, systems, and methodologies that apply cutting-edge technologies to enhance the efficiency, productivity, and sustainability of farming practices. 

It plays a transformative role in revolutionizing the sector by enabling smarter, data-driven decisions. Through tools like precision farming, farmers can analyze soil health, optimize irrigation, and apply fertilizers more accurately, leading to reduced waste and increased yields.

Additionally, IoT sensors and drones provide real-time insights into crop health, allowing early detection of pests or diseases and timely interventions. Meanwhile, automation, such as robotic harvesters and self-driving tractors, helps to address labor shortages while improving operational efficiency.

Agritech can also redefine the supply chain, ensuring traceability and reducing food waste through technologies like blockchain and predictive analytics. These innovations not only make farming more productive and sustainable but also help meet the global demand for food in an environmentally responsible way.

The role of AI in revolutionizing agritech

AI's ability to analyze vast amounts of data and deliver actionable insights can revolutionize the agritech sector, introducing smarter, more efficient, and sustainable solutions to traditional farming challenges. By leveraging machine learning, computer vision, robotics, and big data analytics, AI can transform every aspect of agriculture through:

• Precision farming: AI-powered systems analyze data from sensors, drones, and satellites to optimize irrigation, fertilization, and pest control.
• Crop monitoring and disease detection: Computer vision and machine learning models process real-time imagery from drones or cameras to identify early signs of disease, pest infestations, or nutrient deficiencies.
• Autonomous machinery: AI-based self-driving tractors, robotic harvesters, and automated irrigation systems can reduce labor dependency and increase efficiency.
• Supply chain optimization: AI helps streamline the agricultural supply chain by predicting demand, minimizing food waste, and ensuring traceability.
• Predictive analytics: AI analyzes historical and real-time data on weather patterns, soil health, and market trends to forecast yields, predict pest outbreaks, and plan planting schedules. This helps farmers mitigate risks and make informed decisions.

Additionally, AI models can stimulate the effects of climate change on crops, helping farmers adapt by choosing the right seeds, planting strategies, and technologies to sustain production in extreme conditions.

Challenges and Concerns 

Despite the immense potential of AI in agriculture, its adoption comes with significant challenges and concerns that cannot be overlooked. From issues of affordability and accessibility to ethical dilemmas and data security risks, these hurdles highlight the complexities of integrating technology into traditional farming systems.

Finally, the integration of AI into agriculture is not just a technological shift, it is a revolution that holds the potential to address some of the most pressing challenges of our time. From enhancing productivity and sustainability to enabling climate-resilient farming, AI is transforming how food is grown, harvested, and delivered to consumers. As we look to the future, the promise of AI in agriculture lies in its ability to balance the demands of feeding a growing population with the urgent need to protect our planet.

Noha Gad

The agricultural technology (agritech) market in Saudi Arabia is experiencing significant growth as the Kingdom invests heavily in modernizing the agricultural sector through cutting-edge technologies, in alignment with Vision 2030 goals of diversifying the national economy and ensuring food security. 

The agritech startup ecosystem in Saudi Arabia is rapidly evolving, backed by government support, private investments, and innovative entrepreneurs. Additionally, the focus on sustainable and efficient agricultural practices aligns with global trends, positioning the Kingdom as a potential leader in agritech developments in the Middle East and beyond.

In this regard, Sharikat Mubasher had an interview with John Keppler, Executive Chairman of iyris, one of the leading agritech startups in Saudi Arabia specializing in advancing commercial farming for low to mid-tech farmers in hot climates globally.

First, can you share more details about iyris' solutions to advance commercial farming in warmer climates? 

iyris is a pioneering Saudi-founded Agritech company. We specialize in solutions which enable sustainable commercial farming in hot climates. 

Our founders designed solutions to make it easier for farmers to grow fresh crops in difficult environments. Derya Baran, Mark Tester, and Ryan Lefers each had an academic and commercial focus on mitigating the impact of climate change to help feed the world’s growing population sustainably.

In our lead product, SecondSky, we created a range of greenhouse coverings that minimize the stress and impact of near-infrared heat radiation on plants while allowing the spectrum of light that plants need for photosynthesis. This is revolutionary in the agriculture industry. It delivers more resilient, productive, and profitable crops in regions where climate change and excessive heat make it difficult to grow fresh produce sustainably.

SecondSky’s polycarbonate, polyethylene, nets, and soon-to-be-launched shade screens are deployed to customers growing fresh produce in the UAE, Saudi Arabia, Egypt, Morocco, Spain, Portugal, Mexico, and North Africa. 

While the nanomaterials we invented to make these benefits possible are proprietary and complex, our business model is designed to deliver this innovation as simple as possible by making it a drop-in solution to existing manufacturing and distribution channels.  That way, our customers can buy their roofs, nets, and screens using SecondSky as a one-for-one replacement for traditional plastic greenhouse roofing. 

Utilized by growers on five continents and in 11 countries, SecondSky alone delivers a reduction in energy use by over 40% and water consumption of 30% at customer installations and we have seen crop yield increases and growing season extensions by as much as 35%.

Additionally, iyris has developed plant genetics via a novel hybridization process that has the potential to breed resiliency to salinity, head, and drought processes across a broad range of crops, ensuring stress-resistant, dependable food production. The technology is already demonstrating exciting results with some of the world’s largest tomato growers in large-scale open-field trials.

How could iyris’ climate-smart solutions enhance agricultural sustainability in Saudi Arabia?

iyris’ climate-smart solutions play a pivotal role in enhancing agricultural sustainability in Saudi Arabia and beyond. Invented at KAUST in Saudi Arabia, our technologies have been trialed and tested to withstand the Saudi Arabian climate. The academic and scientific resources at KAUST and funding and incubation provided by the university and its seed and venture funding capabilities have been a critical part of our journey in developing products in Saudi, by Saudi, and for Saudi, and then exporting to the world. 

It works well in the region because it was developed for the challenges of the region, which given the implications of climate change are having a negative impact globally.   

iyris’ SecondSky technology blocks heat radiation effectively, making it ideal for addressing the challenges of the extreme Arabian Gulf conditions and helping to increase food security in a country where 85% of its food is imported. In targeting low to mid-tech farmers, who represent more than 70% of growers worldwide, we provide an immediately deployable solution that impacts growers from the moment it is installed. 

In the Saudi Arabian context, that means that farms that were unproductive can be brought back into the supply chain very quickly. For each kilo of produce that is grown locally, that is a kilo less that needs to be imported, or transported across the Kingdom. Every farmer who can grow both in a financially and ecologically sustainable way protects the future of their local communities and has the potential to reduce urban drift. 

We have already executed pilot projects within the Kingdom where these benefits are starting to be seen and it’s a program that we think can be widely expanded.

Pure Harvest Smart Farms concluded a deal to acquire iyris’ facility in the Kingdom. In your opinion, how could this step help iyris to broaden its presence in Saudi Arabia?

The sale of our facility in Saudi Arabia to Pure Harvest Smart Farms reflected our strategic transition into a pure-play technology company. Known for its commitment to sustainable and climate-smart farming, Pure Harvest was an ideal partner to take on this facility.

The integration of our SecondSky heat-blocking technology at the facility aligns with Pure Harvest's dedication to sustainable agriculture and solidifies our technology as a valuable asset in Saudi Arabia's agricultural landscape. 

This sale solidifies existing partnerships (e.g. Alajaweed Farm), presents opportunities for collaboration, and fosters the growth of innovative agricultural solutions in the region. The move has advanced sustainable agriculture and addressed climate-related challenges in Saudi Arabia, strengthening our presence in the Kingdom.

What about your recent $16 million Series A funding round? 

In May 2024, we raised a $16 million Series A round. We are proud of this vote of confidence from the investment community, which comprised existing and new investors.

The fundraising was led by Ecosystem Integrity Fund (“EIF”), a San Francisco-based climate and sustainability fund supporting high-growth companies that drive a positive environmental impact, with further support from Global Ventures, Kanoo Ventures, Dubai Future District Fund (DFDF) and Bonaventure Capital. 

The proceeds will help support increased sales coverage and delivery of iyris’ strong international sales pipeline for our SecondSky greenhouse covers and nets. It will also fund the continued development of our innovative heat-blocking products and resilient plant genetics, which both have huge potential to improve yields further. 

We are grateful for the investors who have recognized that iyris technology solutions deliver tangible benefits to the farming community and understand its wider potential. Our investors understand there is a clear and focused strategy for delivering scalable AgriClimate technologies into our addressable market. 

What are iyris’ plans to expand beyond the Saudi market, notably in Egypt and East Africa? And how do you see the future of sustainable farming and agriculture in Africa?

We are actively expanding our footprint in North and East Africa, delivering adaptable and effective solutions to commercial farming. In March 2024, we signed a strategic MoU with Magrabi Agriculture, Egypt’s leading fresh produce provider, enabling iyris’ cutting-edge technology to be deployed across Magrabi’s farming facilities and international operations.

This is one of several examples of successful partnerships and endorsement by key stakeholders in the region, as we continue to work closely to transform agriculture globally. 

In your opinion, how do iyris’ solutions contribute to tackling climate change?

With the global population estimated to grow to 10 billion by 2050, food security and farming in a sustainable manner (both environmentally and fiscally) is a worldwide challenge. By providing sustainable and efficient solutions that reduce water and energy consumption in farming practices by up to 90%, we contribute significantly to the collective effort to tackle climate change and promote a sustainable future.

We are proud to be helping feed the world in a climate-friendly manner.