It's not uncommon for entrepreneurs to start talking about their exit strategy in detail during one of their first meetings with a VC. While it's generally a good idea to indicate your intention of eventually exiting, VCs do not want to hear that you believe you have figured out the exact timing and buyer. To clarify, VCs like to know that there are potential buyers in the market and that you intend to exit; they don't want to hear that you 'know' who is going to buy you unless you have had serious discussions toward that end with the potential acquiring party.

VCs don't like to hear these speculations for a few reasons.

• First, you should not be too focused on the exit, you should be focused on building a great company. Great companies are often attractive acquisition targets - the exit will take care of itself.
• Second, if there are numerous potential buyers, you seem naïve to think you know who will make the acquisition.
• Third, if there is only one potential buyer for your company (which is rarely the case), that circumstance presents a substantial risk that VCs won't like.

However, if you are asked about who might acquire your company be prepared to answer that question. The best answers not only list a potential acquirers but include rationale for the acquisition and examples of similar purchases made by that company.

My guess is that entrepreneurs describe their detailed exit plan because they know VCs want to back entrepreneurs that intend to develop an exit strategy for their company. However, in your first round of fundraising, it's generally better to say something more open ended such as, "I hope to be acquired in 3-5 years by one of the many potential buyers, but am focused on building a great company that will have lots of options."