What Are The 5 Exit Strategy?

What Are The 5 Exit Strategy?

1 Answer

  1. Well Manushree there are not only five strategies, just so you know there are so so many ways of exit strategies but if you want then I’ll be listing five of them here, which I think are significantly good for businesses.
    1. Merger & Acquisition (M&A): It means merging with a similar company, or by acquisition we mean being bought by a larger company. These both situations are good when bordering companies have complementary skills, and can save resources by combining. While for bigger companies, it’s a more efficient and quicker way to grow their revenue than creating new products organically.
    Initial Public Offering (IPO): This strategy was really famous back then specially amongst big companies. But since the Internet bubble burst in the year 2000, the IPO rate has declined. I don’t think this approach is good for startups these days. As the shareholders are demanding, and liability concerns are high.
    Sell to a friendly individual: A friend in need is a friend indeed. It’s a great way to “cash out” so you can pay investors, pay yourself, take some time off, and get ready again. The ideal buyer is someone who has more skills and interest on the operational side of the business, and can scale it.
    Make it your cash cow: Like how some of the big companies run these days, owner is not the manager. It’s a good option you are in a stable, secure marketplace, with a business that has a steady revenue stream, pay off investors, find someone you trust to run it for you, while you use the remaining cash to develop your next great idea. You retain ownership and enjoy the annuity. Although the cash cows seem to need constant feeding to stay healthy.
    Liquidation and close: Lastly if nothing, one often-overlooked exit strategy is simply to shutdown, close the business doors, and liquidate.

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