Founders may leave crypto projects for many reasons, such as starting something new, burnout, family needs, or taking advantage of a good market opportunity. Some crypto projects want the community to take over, while others look to give team members or early supporters a way to cash out. Timing is often more important than speed, since buyers and markets prefer steady performance and clear records.
In this article, we’ll cover common exit options, how each works, and provide a checklist to help founders manage a smooth and secure transition.
Internal buyout
An internal buyout happens when project team members or insiders with tokens buy the project. This keeps expertise within the team and avoids major disruptions. In crypto, it might involve handing over admin keys, transferring treasury tokens, or selling company shares. Use staged payments, escrowed tokens, or milestone-based earn-outs to keep everyone motivated during the transition.
Initial public offering
Taking a crypto company public is rare but possible, especially for exchanges, infrastructure providers, or companies with steady revenue. An IPO needs audited financials, strong compliance with securities laws, and public reporting. Tokens can make things more complex, since regulators might see them as securities. Teams thinking about an IPO should get several years of audited records and legal advice on token status before starting the process.
Strategic merger
A strategic merger joins your project with another organization that benefits from your product or market. In crypto, this could mean merging with a traditional finance company, a more established crypto business, or an adjacent Web3 platform. Crypto M&A can add resources and help with growth, and it may lead to higher valuations if there are clear benefits. Buyers will usually do thorough technical checks on your smart contracts and treasury, and they may offer retention deals to keep key team members.
Sale to a financial buyer or private equity
Financial buyers like private equity want steady cash flow and ways to grow. When they buy a crypto startup or project, they usually focus on the team and intellectual property behind the project, not just the token. PE also cares about revenue from services, software, or custody fees. They often prefer buying assets instead of tokens, and want clear financial records and proof of how the project makes money. Rules and how tokens are classified can have a big impact on price and deal terms.
Partial sale
A partial sale allows founders to get some cash out while keeping a stake in the crypto project. In Web3, this might mean selling part of the company, auctioning some reserved tokens, or letting a strategic investor buy treasury tokens with a lockup. Partial exits work well if the team wants to stay involved or if the market expects strong future growth. Make sure to include details about vesting, voting rights, and how treasury funds can be used in the agreements.
Practical exit checklist
Due diligence and cleaning the record
Buyers will closely review your finances, contracts, token distribution, code audits, and governance history. Get your financial statements, tax filings, and a summary of earnings ready for the company if needed. Doing your own audits of smart contracts and keeping records of important changes or upgrades helps avoid surprises.
Pick the right advisors
Put together a team that includes a lawyer who knows digital assets, an M&A advisor or broker, an accountant, and a technical expert for smart contracts. These advisors help set fair price expectations, market the deal, and handle negotiations, letting founders stay focused on running the business during the sale.
Valuation approaches
Valuing a crypto project mixes standard finance methods with token-specific factors. Buyers consider things like revenue multiples, protocol fees, user activity, staking, and how tokens are released. If tokens give governance or revenue rights, their dilution and lockup terms affect the project’s value. Getting a professional valuation or comparing to similar deals helps sellers set realistic expectations before talking to buyers.
Equity incentives and retention plans
Keeping key people on board is often more valuable than a cash payout. Use earn-outs, vesting schedules, or token releases tied to milestones to keep founders and important team members involved during the transition. If the team is joining a new owner, set employment terms, severance, and advisory roles ahead of time.
Contracts and transfer mechanics
Clearly list what is being transferred, such as intellectual property, admin keys, multisig access, treasury assets, or company shares. For on-chain assets, plan for gas fees, custody, and whether tokens will be transferred on-chain at closing or held in escrow. Using staged handoffs can help lower operational risks.
Regulatory posture and compliance
Regulators are paying more attention to crypto mergers, token transfers, and custody. Get legal advice on whether your tokens count as securities in each area you operate, and be ready to show your KYC, AML, and custody processes. Buyers appreciate clear regulatory status and a strong compliance record.
Communication plan
Share news of changes with users, partners, and the community all at once in a planned announcement. Leaks can lower the value of the deal. Prepare FAQs, user guides for migration, and a clear timeline so everyone knows what to expect.
Post-close considerations
After the deal closes, update governance documents, change keys if needed, and pass on operational guides. If there is still a treasury, make sure its management and audits are clear. Many of the steps in the checklist also apply after closing to help keep value and trust.