This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, I'm really excited about our next guest. Tarage Parong has seen a lot. He's been working in Silicon Valley since the late nineteen nineties. He's been involved in hundreds of M and A transactions and venture capital investments. Right now, he's the CEO at Server Robotics. You might recall this spun out of Uber. It focuses on sustainable self driving delivery. He's also got
a brand new book out. It's called Exit Path, How to Win the Startup Game. Tarage joins us this afternoon from Palo Alto, California. Tarage, how are you. It's good, very good. Good to be on the show. Yeah, it's good to have you with us. Hey, I want to get to the book in just a second. But but before we get to that, I want to just hear what the environment in Silicon Valley is like right now.
As I mentioned, you have experienced there through several economic cycles, including the dot com crash of the late nineteen nineties. What do you see when you look around the landscape right now? Give us your your take, Yes, it's like deja vu all over again. Rightly, So we've been through this a couple of times, as you said, yes, late nineties. Uh, this feels a bit more like the two thousand and eight two thousand nine downturn. We're kind of venture capital
funding a bit dried up. There was no end in sight for the doom and gloom, and you know, there were all sorts of memos issued by venture capital firms about you know, rest in peace, good times, right, So it's very reminiscent of that and layoffs unfortunately, you know, uh, companies cutting costs or being advised by their boards to cut costs so that they can extend their runway. So bring this deja vu that you're feeling. And this landscape
that we're in, we're funding is drying up. What does that mean for startups and the business of startups because I mean even in the public equity markets, you know, companies that are well established, feels like a very rocky time. It is, it is at certain times. The thing about startups is that a lot of them are in the value creation business. There they kind of have a longer
term horizon, especially the earlier stage startups. I feel that earlier stage investors actually continue plug away and continue investing their activities. You know, we've seen in other downturns and a lot of valuable companies were created are founded during the downturn, So there's no reason for early stage investors
to kind of pull back. The problem is with a bit of later stage investors who have invested a very healthy valuations and now they're facing down rounds or sort of uh have there's a reckoning that has come to them, and um that's impacting you know, the moral uh of the teams, of their founders, of the investors. So in the later stage games, it's a bit of a hard time. What's interesting, though, Tarage, is what's happening right now now. I mean the Nazdak nearly in just a couple of months.
I'm wondering if the worst is behind us right now. And I know we're talking private versus public, but there is some connection here. There is a connection. Especially you know, at the end of the day, you know, companies either want to get public or be acquired, right, Yeah, the public market definitely has an impact private markets as well. Um, you know, it's hard to tell, but my hope is that the worce is behind us for sure. Okay, well, let's get into the book a little bit and talk
about exit path. Because you have personal experience with trying to sell a startup of yours that didn't end up working out the I p O route or the sales route, why do you argue that founders should be less focused on I p O s and more focused on being acquired. Yes? Absolutely, um So you know, if you look at the stats alone, most startups don't make it. You know, over seventy actually venture back startups who have rates more than a million don't end up returning the money to their investors. So
the chances of success are very slim. Now, those who do manage to make it through are either acquired or public. For every I p O there's dirty acquisitions. So odds are your chances of uh actually making it and surviving is through a strategic sale. Um. I experienced that with my first startup because we were single, singularly focused on just that I p O. We ignored really any strategic
conversations building relationships with potential acquires. At What ended up is that in two thousand and two tho nine, during a time very similar to now. Um, we had to sell because we couldn't raise any more money and we didn't have those relationships to fall back on, and um it was a failure because of that, right, And I mean it's a really interesting point that odds are you're probably going to get acquired, You're more likely to do
that then go public. But it still feels like going public a lot of people sort of regarded as sort of the holy grail for a lot of these startups. But if the case is that you know your company is much more likely to go bought, I mean, should founders be sort of preparing for that possibility and trying to line up chips for that possibility. That's what I've
seen workouts really well for founders. UM, you know, in my next startup after that failure, I actually the first thing we did, we we created our eggit strategy and we did an outside and by doing so, just that act alone set in motion a series of events that led to a very successful exit. UM you know, web stuff Come was the name of the company we sold to visit the print and more than tenets, multiple revenues. Um, it was a very good outcome, and I credited because
we did take those steps. Now it had to be even gone forward. We decided not to sell and had gone uh you know, with another round of financing and gone all the way to IP. Having had acquirers would make our IP a lot more successful because now we have actually leveraged in those conversations with investment banks. Turage, we only have about forty five seconds left. But how do you know when to walk away from an offer when you know that you can get a better offer
because you just don't know. Yes, that's why you know. There is a lot of upsites optionality. So the only way you can walk out from an offer is if you have Bible strategic alternatives. And what I advocate in my book at great length is how to create those strategic optionality for yourself so you can walk out all right. Turage Parong, chief operating officer at Serve Robotics, author of the brand new book Exit Path, How to Win the Startup end Game. Joining us this afternoon on the phone
from Palo Alto, California. Tarage, thank you so much for taking the time and joining us.