The way we talk about exit matters.

WalMart announced a $3.3B acquisition of last week, accompanied by press (e.g. in Fortune and the WSJ) about the big debate surrounding the acquisition: was this a failure? Given all the discussion of dry bubbles and dead unicorns, this might seem a little surprising. Shouldn’t we celebrate a big exit like this? Isn’t this a good sign that investors are getting some liquidity?

Admittedly,’s vision was to eclipse Amazon, and they’re certainly not there yet – but the story also isn’t over. Instead, this was the case of a company providing significant liquidity to investors and early employees while giving itself a large balance sheet. The company has always said that it will need to raise billions in order to succeed in that journey.

Yet the funding environment has turned: Q2 had only 14 $100M+ rounds, down from 37 in Q3 2015, according to CB Insights. Given a decline in late stage deal size and a spike in protective terms that hurt early investors and founders, it seems smart not to rely on late-stage private investors to cover those billions. It’s not as though the public markets have been terribly generous, either: of the ten biggest IPOs in 2015, two thirds are now trading below their offering price.

If we want founders to make smart decisions about exit, we need to change our mindset and the rhetoric we use. There can be no ego in fiduciary duty. But if it’s a “failure” for a founder to get a $3.3B exit, why would founders give up their unicorn potential (or status) to provide liquidity – particularly when investors are willing to write horrible terms with pretty sounding prices? In 2011, Fred Wilson wrote about how there are just not many exits above $100M. We need to reset our expectations and remind ourselves as well as the founders with whom we work that a realized return, particularly a $3.3B valuation from $565M cash in, is something to aspire to – not criticize.

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