Key takeaways
- Strategic fit outranks performance. Even strong, growing ventures should exit when they no longer move the needle for the core business.
- Read the signals early. Market shifts and misalignment with the parent strategy are your two biggest indicators to prepare an exit.
- Own the exit narrative. Stay in front of leadership with investor-style updates and propose divestment before decisions happen without you.
- Use transparency to retain talent. Clear, proactive communication keeps teams stable and engaged through long exit cycles.
- Build divestability from day one. Profitability, independence, and a strong growth story create real optionality beyond shutdown.
Exiting a corporate venture, whether through a harvest, wind-down or divestment, is one of the toughest challenges corporate innovators face. Few people understand this better than Alex Han, founder of Stealth AI Startup, former Head of Business Development & Incubation at Cox 2M and Bundl Venture Club member.
A seasoned founder, operator, and investor, Han has led ventures from incubation to scale, overseen P&L for multiple IoT businesses, and advised early-stage startups through Techstars. He also brings firsthand experience making the hard calls on when to divest or shut down a venture, including:
- Co-founding PupWalkr and guiding its shutdown during COVID-19
- Leading Cox 2M through a successful divestment to a strategic buyer
In this article, we break down the top lessons from Han’s journey to help corporate innovators approach exits as strategic moves that strengthen both the venture and the parent company.
Lesson 1. Don’t confuse growth with strategic fit
Even stellar performance won’t always secure the survival of a corporate venture. Case in point: Cox 2M, launched by Cox Communications to explore opportunities in the IoT space.
While the venture was reaching free cash flow positive and building a solid customer base, it no longer aligned with Cox’s core focus on telecommunications infrastructure. As explained by Han:
“Even though our business tripled year over year, it was still a minuscule drop in the bucket compared to Cox’s $13 billion P&L. Sometimes, it just doesn’t fit anymore”.
The lesson? In corporate venturing, strategic alignment often outweighs growth metrics.
Lesson 2. Catch the red flags early
Corporate ventures rarely collapse overnight. More often, the warning signs are there; you just need to know how to read them. Han highlights two signals that every corporate innovator should monitor closely:
- Market deterioration: When customers stop buying, needs shift, or the original problem set changes.
- Strategic misalignment: When the parent company’s focus moves back toward core areas, leaving your venture outside the strategic roadmap.
Spotting these red flags early gives you the chance to shape your exit strategy proactively, before leadership makes the decision for you.
Lesson 3. Stay ahead of leadership decisions
Executives invest heavily in their decisions and rarely reverse course. So, once a decision is made without your input, it's nearly impossible to claw back.
Han and his team at Cox 2M avoided this trap by treating senior leadership like investors. They created regular opportunities to showcase performance and test alignment at the highest level.
“We ensured we had at least twice a year full readout meetings, performance-wise, how our market’s growing. It was almost like pitching to a group of investors.”
Consistent communication gives you influence. By staying visible and engaging executives directly, you keep a seat at the table when strategic decisions are being made.
Lesson 4. Own the exit conversation
Sometimes the smartest way to save value in a corporate venture is to be the one to suggest the kill. By taking control of the narrative, you keep control and open the door to better outcomes than a blunt shutdown.
That was the approach Han and his team took at Cox 2M when they realised the venture no longer aligned with Cox’s broader strategy.
“We went to leadership and proposed divestment ourselves, to prevent a decision without us that might have been, ‘Let’s just kill it.’”
By bringing the exit plan forward yourself, you demonstrate strategic foresight, keep credibility with leadership, and create time to position the venture for a positive transition.
Lesson 5. Don’t scale without an exit path
Early-stage ventures run on stage gates and timelines that guide scale, pivot, or kill decisions. But once a venture matures, those guardrails tend to disappear, leaving teams in endless growth mode with no structured exit path. Han advises:
“What I would encourage others to think about is not just grow, grow, grow, but to have those exit options in mind all the way along. Because sometimes the exit is actually the best outcome.”
In other words, exit frameworks shouldn’t end after incubation. Even at later stages, ventures need clear criteria for when to pivot, shut down, or divest; otherwise, decisions risk being driven by politics or timing rather than strategy.
Lesson 6. Use radical transparency as a retention strategy
Conventional wisdom says you should keep M&A or divestment talks confidential to avoid unsettling employees. Han advises the opposite approach:
“Instead of creating this cloud of uncertainty, we sit teams down and say, ‘This is objectively the situation we believe we’re in. We think the best outcomes are options A, B, and C, and here’s the one we’re pushing hardest on.’”
When executed the right way, transparency doesn’t create fear; it builds trust and buy-in. Smart people sense uncertainty anyway. It’s better to control the narrative than let rumours take hold.
Lesson 7. Make your venture divestible
A good way to ensure the longevity of your venture is to make it divestible, so it appeals to outside buyers if the parent decides to exit. Without that optionality, the default outcome is often shutdown.
Cox 2M built that optionality by becoming both profitable and operationally independent. As explained by Han:
“What made it a good candidate for divestment was that it was both EBITDA and free cash flow positive. It created the optionality to approach buyers and say, ‘You’re not taking on a business that’s losing money.’”
Being profitable and operationally independent eventually made Cox 2M more attractive to strategic buyers, private equity, or growth equity firms. Cox 2M was eventually acquired by Cognosos, Inc., setting the stage for its next chapter of growth.
Final thoughts
As Han’s experience shows, the strength of a venture lies not only in how it scales, but in whether it is built to pivot, divest, or shut down while still creating value.
A big thanks to Alex Han for taking the time to share his insights with us and the BVC community. For more Bundl Venture Club insights, be sure to sign up for our next roundtable. Hope to see you there!
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