The Benefits of Having a Coach/Advisor in Your Corner
Being an entrepreneur, founder and CEO is the American Dream. It’s likely to be the greatest sustained adrenalin rush a person can have professionally, outside of extreme sports. It can be all-consuming, all-demanding and unrelatable to 90% of the population.
Whether you’ve already started your entrepreneurial journey or are about to start, it’s important to prepare mentally and ideally, physically. Although there will be many sprints along the way, your journey will be a marathon testing your grit, will, spirit and resolve. You will hear many naysayers tell you that you can’t do it, it’s not a good idea, it won’t work, etc., etc.… You must have full and utter resolve, faith and confidence in your vision, and block out all the noise. Very few can see what you see.
It's important though, to know some key facts and figures around starting, operating, growing, and eventually selling your business.
Key Facts and Figures
Survival Rates for New Businesses
Why Do Businesses Fail?
The most common reasons statistically include
Lack of Market Demand (~42%)
Cash Flow Issues (~29%)
Poor Management or Planning (~23%)
Competition (~19%)
Regulatory and Tax Challenges (~10%)
Factors That Increase Success
Having a business plan
Starting with sufficient capital
Focusing on profitable industries (e.g., healthcare, technology, and finance have higher survival rates)
Meaningful Exits
When setting up and building your company, it’s important to think of your exit strategy. Even if you love your business and never want to sell, it’s still prudent to have the option. Even more importantly, it puts you in the mindset of setting up systems and not relying on yourself for everything. You should always be asking how your business can run and thrive if you aren’t part of it anymore. These systems of support are the only sustainable way towards maintaining a balanced life while running and growing a business that’s sizable enough to be able to have a meaningful exit. It takes time, overnight success is a myth.
The average age of businesses at different exit valuations varies by industry, but generally follows these trends:
Most exits happen between 7-12 years and are between $10M- $100M and happen between .01% - .001% of the time
Larger exits ($500M-$1B+) take 15-20 years on average, though extreme tech outliers sometimes exit faster.
The percentage of businesses achieving these valuations drops exponentially as valuation increases.
These are just statistics, raw numbers. What these numbers can’t tell you is who will overcome all of the obstacles and become part of the .01-.000001% who have excelled and accomplished the American dream.
The top three characteristics of founders who achieve successful exits (based on research from Harvard Business Review, VC studies, and startup success data) are:
If your dream is to start, grow, and eventually sell your company and live happily ever after then you’ll want to maximize your chances of success by finding a coach/advisor/mentor as early into your entrepreneurial process as possible:
Below is some critical data:
Estimated % of Exited Businesses with Coaches or Advisors
(Based on VC, private equity, and entrepreneurship research)
| Exit Valuation | With Coach/Advisor | Without Coach/Advisor | Increased Chance with Coach |
|---|---|---|---|
| $10M+ | 60% | 40% | 50% |
| $25M+ | 70% | 30% | 133% |
| $50M+ | 80% | 20% | 300% |
| $100M+ | 90% | 10% | 800% |
| $500M+ | 95% | 5% | 1800% |
| $1B+ | 98% | 2% | 4800% |
Key Takeaways:
Even at the $10M level, at least half of exits involve coaching and have a 50% greater chance of an exit with a Coach or Advisor!
Larger exits almost always involve advisors. Nearly all businesses that sell for $100M+ have experienced advisors, mentors, or business coaches (e.g., board members, investors, or industry experts).
VC-backed companies nearly always have advisors. Many investors provide advisory support to help startups scale.
Your best chance of a successful exit involves starting out with a good Coach/Advisor. It is essential that he or she is a good personality fit, shares your values, and is someone you absolutely trust. You will build a lasting relationship with your Coach/Advisor and they will become your thought partner. It is one of the most important early decisions you can make as a Founder or early stage CEO.