What is an Exit Strategy?
An exit strategy is a planned approach for a business owner to liquidate their ownership stake, typically through acquisition, merger, or IPO.
Table of Contents
Full Definition
Exit strategies help founders and investors realize returns on their investment by selling the company or going public.
Common exit routes include mergers and acquisitions (M&A), initial public offerings (IPOs), or management buyouts.
Choosing the right exit plan involves timing, market conditions, and business valuation.
Examples
Acquisition
IPO (Initial Public Offering)
Management Buyout
Benefits
Generates liquidity
Rewards investors and founders
Enables new growth phases
Common Mistakes
Can be complex and costly
Requires strategic planning
Conclusion
A clear exit strategy aligns stakeholders and maximizes the value created through the business lifecycle.