Planning An Exit Strategy For Your Business

30 March 2015
 Categories: , Blog


Starting a business requires a lot of time, effort, and money. The problem is that the money you pour into starting a business can become tied up in the business. Thus, you work and work and never full reap the benefits of your labors. For this reason, you need to have an exit strategy in place from the beginning because it takes time to get everything together. You need your specific exit strategy early on, so you can make informed preparations. 

An Initial Public Offering

One way for you to get some money out of your company is to offer shares of the company to the public through an initial public offering or, IPO. Once you offer shares to the public, you can sell your shares of the company on the open market. Advantages of an IPO is theta you can sell your shares to turn your investment into liquid while still maintaining your position in the company. You might call this a soft exit in that you don't have entirely leave your business, but you have liquid to pursue other business ventures if you so choose. . If you are ready to cash out your share of your company and walk away immediately, then maybe an IPO is not the right approach for you. 

Strategic Acquisition

If your company produces a product that is attractive to other businesses, there may be those who are willing to purchase your business so that they can more easily get their hands on your product. In some cases, they may want to keep you and your management team in place, but they may also want to put their own team in place. If you are trying to walk away from your company so that you can move on to other projects, you can structure the buyout in such a way that you get the money you want and a clean break from you old company so that you can move on to new ventures.

There are other exit strategies that you can look into, and in some cases, you can pursue more than one option at the same time. While one exit scenario might be more attractive to you than others, market trends might make one option more viable than others. Thus, you might market your company to potential corporate buyers while still pursuing an IPO. Keeping your options open will help you to turn your shares in your company into liquid when the time is right for you to do so. For further assistance, contact professionals, such as those from RLS Associates.


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