A unicorn valuation is a milestone, not money in the bank. Founders, employees and investors only get cash through liquidity events.
Types of exits
- Acquisition (M&A): another company buys yours, for cash, shares or both. It’s the most common exit for startups.
- Secondary sale: existing shareholders sell some shares to new investors during a funding round.
- ESOP buybacks: the company or investors buy vested options or shares from employees.
- IPO (initial public offering): the company lists on a stock exchange and sells shares to the public.
IPOs in India
Indian new-age companies have increasingly listed at home. Recent examples include Honasa Consumer (Mamaearth) in 2023, and Groww, PhysicsWallah and Meesho, all of which listed in late 2025.
- Main board (NSE, BSE): for larger companies, with eligibility rules on profits, net worth and assets, or alternative routes for companies that don’t meet them.
- SME platforms (BSE SME, NSE Emerge): for smaller companies, with lighter requirements.
- The process runs through SEBI: appoint merchant bankers, file a draft prospectus (DRHP), receive SEBI’s observations, file the final prospectus (RHP), take orders from investors, then list. Promoter shares are usually locked in for a period after listing.
- Being public brings quarterly reporting, disclosure obligations and scrutiny of every decision.
The payout waterfall
In an acquisition, money flows in order:
- Debt and transaction costs
- Liquidation preferences for preferred investors (Level 8)
- Remaining proceeds shared among all shareholders, including founders and employees who have exercised options
Taxes then apply depending on the holding period, instrument and residency. Model it in the Cap Table Calculator and get professional advice.
Build for the long term
The founders who achieve great exits rarely chased them. They built companies customers loved, with strong unit economics and clean governance, which made buyers and public investors eager.
You’ve completed the Founder Playbook
You now understand the full journey: idea → validation → business model → setup → MVP → customers → team → funding → operations → scale → exit. Put it into practice in Build Your Unicorn, use the Founder Toolkit, and share your idea on the Ideas board.