Starting and then exiting an entrepreneurial venture takes a lot of time and energy: it’s not for the faint of heart. But despite the pressure, some people can’t get enough of setting up companies. Frédérik Plourde, who has founded three start-ups in his time – Axya, Statera and Bewe – is one such entrepreneur. We spoke to Frédérik about the addictive nature of entrepreneurship and why it’s important to build each company with a long-term exit strategy.

Tell us a bit about your story: how did you become a serial entrepreneur?

In many ways, it took me a little while to find my path, even though I became an entrepreneur at a young age. Honestly, I was a bit lost when I was at school: I couldn’t focus in class and concentrated on sports instead. I was involved in ice hockey, football and cycling at a high level. These activities gave me the sense of purpose that I was missing in my studies.

It was only later that I realised I needed to emulate my attitude to sport in my professional career. I could never envision myself as a ‘9 to 5’ employee – I needed some kind of external, bigger-picture motivation. Finally, at university I had an opportunity to pursue this: I started a course in engineering, but then picked up a part-time certificate in entrepreneurship too, which lit a fire in me.

As part of this course, I had to build a start-up business case with another student, and we put so much passion and verve into it that it became a legitimate business idea. Soon after, we went to a start-up incubator in Montreal, which put us in touch with various coaches. And from there, we started building the company. After a couple of years of being an entrepreneur by day and studying by night, I was 21 years old and had over 10 employees. It was a steep learning curve, to put it lightly!

Investors then came along, but taking on their funding meant that my co-founder and I had to decide between leaving university or the company. We ended up exiting Axya, which was a really tough moment. It took me at least three months to come to terms with the loss. But at the end of that period, I said to myself: I know how to build a company, I know what mistakes I made. So now, I’m ready to do it again. And that’s what I did, first with Statera and then with Bewe.

Bewe is your third venture: what do you do differently now in terms of strategic decisions?

As I mentioned before, I also trained as an engineer, which gives me a valuable perspective on problem-solving. In fact, founders with technical expertise are often judged to be among the best, as they focus on solving problems and delivering high-quality solutions to users. However, this meant that money was not always at the forefront of my mind in my early ventures. Speaking honestly, the finances in my first company were a mess: we saw expenses as a challenge to be minimised rather than an opportunity. And on the flip side, my co-founder and I felt threatened by external funding experts coming in and telling us how to clean up our business model and run our company. We took everything very personally.

Nowadays, with a bit of experience and maturity on my side, I take a more pragmatic view. Running a company means making tough decisions, which often require you to move beyond your own ego. And having come to understand the complexities of financial modelling, I am much more clued up about the financial side of things. Ultimately, as an entrepreneur, you’re looking to build a viable product that can generate profit, as well as solve a problem in society. You need to be able to bring these two demands together.

As a result, I always keep the company’s value and the potential return on investment in mind – it informs my entire strategy. In fact, I often put myself into the shoes of a potential acquirer and judge what might attract them to the company and what sort of offer they might make. In the case of Bewe, one of our biggest assets as things stand is intellectual property – but I’d make sure there was scope to convert this into a commercial agreement (and therefore revenue) before I exited.

Building on this, in your opinion, what are the signs that a company is ‘exit-ready’? How do you prepare for this as a CEO or co-founder? 

It’s all about relationships in this industry. The sense that it’s time to start preparing for an exit doesn’t come out of nowhere. Rather, it’s generated by looking at your peers and talking with experts and mentors. By drawing on all of these sources, you can gauge when your technology is mature enough or your contribution has reached its maximum point, at which point it’s probably wise to let go.

But it’s not just about the company being ready. As an entrepreneur you also have to be ready for the exit. On the one hand, you should build a company for growth and not purely for sale, but when the inflection point arrives and you receive an offer or you feel the moment has come to exit, you shouldn’t be caught off guard. You never know what’s around the corner, so it’s prudent to adopt a general mindset of preparedness when you’re running a company.

Indeed, embarking on the exit pathway may feel like a huge victory to begin with, but exits can also be fraught with delays and setbacks, plus they’re often followed by burnout and loss of purpose, so you need to make sure you’ve got support to deal with that. It’s like a breakup: you’re separating from your company, your co-founders and your employees, which can create a huge amount of emotional stress. To keep working effectively and stay healthy, you need to channel those feelings somewhere – I’m personally a big advocate for exercise and psychotherapy.

What are the most common misconceptions you hear about preparing for an exit?

First and foremost, not enough entrepreneurs understand what goes into valuation. It can seem like some kind of complex sorcery, but there is method in the madness. You just need to get to grips with the figures.

I also see a lot of unrealistic expectations. As an entrepreneur, you hear stories about billion dollar exits – and you can certainly aspire to this level, but you have to realise that this rarely happens. An exit won’t necessarily make you rich, because there are many other stakeholders to consider. Indeed, if you’re a venture capital-backed company, the founders are the last to receive any money – everyone else gets paid first, and when you take legal and other fees into account, sometimes the final payout can feel a little anticlimactic.

Finally, exits can take a lot longer than expected. Many founders think they’ll be able to extricate themselves in two or three months, but based on my experience, it’s closer to a 12-month journey. The acquirer has an incentive to draw out the process, because you’ve already agreed to a valuation and anything you create after that is an added bonus for them. As I said, you need to have a whole psychological strategy in place to deal with the marathon.

What advice would you give a founder starting a venture today?

 Above all, I would advise a founder to treat their company as if it were in the room too. That way, they ensure that they’re keeping their venture’s best interests at heart.

So, if I were in a meeting today with Bewe, I would say: we’re working together to address an unmet clinical need with a technological solution. There are other major players in this space, such as health insurers, big pharma and digital weight-loss companies, but they don’t have our disruptive solution. What’s the potential impact of this solution? How much would these players be willing to pay for it? And how can we position ourselves to make it as attractive as possible? In this way, we keep one eye on the wider market while also focusing on the value we, as a company, are individually bringing to the table. Bewe isn’t just a vehicle to get to a good exit destination, but an important participant in the journey.

For founders in the life sciences, I would add: remember why you’re doing what you’re doing. It’s easy to get caught up in the addictive, competitive side of entrepreneurship – it’s like the corporate Olympics, after all – but in the life sciences you’re working to improve people’s quality of life. Even when you get mired in regulation, cash flow and risk, you can’t lose sight of the fact that your product might contribute to saving someone’s life or alleviating their pain, as well as reducing healthcare costs, among other things. Let the possibility of multiplying these positive impacts be an additional driver as you look to exit your company – it makes the reward that bit sweeter.