What is an exit?

Also know as exit strategy, exit is a strategic plan that business owners use to leave or sell the business. Entrepreneurs, investors, venture capitalists, and individuals use a company exit strategy to sell assets for a profit or limit losses. Having an exit strategy business plan helps protect you, your business, and investors. Common types of exit strategies include a strategic acquisition, initial public offerings (IPO), management buyouts, and selling to someone you know. Other examples of exit plans are mergers, liquidation, or filing for bankruptcy.

What is the objective of an exit?

The objective of an exit is exit is to let entrepreneurs sell their ownership in a company to investors or another company. An exit strategy gives business owners a way to reduce or liquidate their stake in a business and, if the business is successful, make a substantial profit. If the business, however, is not successful, an exit strategy enables the entrepreneurs to limit losses. An exit strategy may also be used by venture capitalists to execute a cash-out of an investment.

What are common types of exits?

Common types of exits include a strategic acquisition by a larger company, initial public offerings (IPO), management buyouts, and selling the company to someone. Other examples of exit are mergers with a company of the same or different size, liquidation, or filing for bankruptcy.

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