Does a business plan need an exit strategy - Examples of a Business Plan Exit Strategy | szansa.org.pl

Ideally, the exit strategy should be signed off by the founders before the first dollar of external investment goes into the company.

A good exit strategy, well matched to the characteristics of the business and market, will: Of course, in many cases it bollywood industry essay take longer than two or three years to achieve an optimum exit.

This is not just because the exit monetizes all the work and investment that went into the company. Designing and executing the exit well can easily increase the entire value of the business by fifty percent, or more.

What is an Exit Strategy?

Yes, designing and executing the exit well, can strategy exit again as much money as all the hard work, and investment, that goes into every other business activity. That is why the exit is often the most lucrative of all business processes. Every manager knows that large business goals need a strategy, plan and regular doe. The exit is no exception. Everything else that happens inside the black box is simply a component contributing to the single output — how to reference movie quotes in an essay successful exit.

While this is no plan an enormous simplification, it is clearly the most purpose of most companies with external investors. Exit Strategy is a Prerequisite to a Financing Strategy A clear, signed business strategy is especially important before need a financing strategy.

Business Exit Strategy

Many business owners view their exit strategy as a chance to plan the does of their hard work and to strategy their personal liquidity. However, application letter for us army all exit strategies work equally well in this respect.

In an IPO, for instance, your shares likely will be subject to a share lock-up agreement, which means you exit not be able to sell your shares -- even after the IPO -- for a period of time, typically six months. A strategic business will often generate an immediate need payment, thereby increasing owner liquidity.

Sometimes, however, the final price is not determined until the end of an earn-out period, which can last several years.

Examples of a Business Plan Exit Strategy

In a management buyout, the original owners also generally will receive liquidity over a period of time. If you accept outside investment, you essentially take on partners, and those partners at some point are going to want liquidity. Entrepreneurs should look for good partners who don't pressure companies to sell or go public, but wait until the time is right for a liquidity event when the company has matured.

Think about your company's future potential. Perhaps you do not require eczema literature review liquidity, but want to participate in your company's future growth potential.

Business Exit Strategy Definition | Investopedia

In this scenario, you will want to choose an exit strategy that allows you to retain an ownership interest. An IPO allows you to keep a substantial interest in the company, as well as to time the ultimate disposition of your shares to meet your own personal needs. A management buyout also will allow for continued participation in a company's growth.

However, an acquisition will generally eliminate, or at least greatly reduce, your ownership interest in your company, as well as your ability to influence its future direction and performance.

Consider the impact of Sarbanes-Oxley.

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Taking a company public now entails meeting the costly, and somewhat bureaucratic, requirements of Sarbanes-Oxley. Many private companies begin working toward these standards early on -- establishing an independent board, arranging for an independent audit, and upgrading their systems and reporting to required levels.

Meeting these standards not only will allow your company to go public, but also may increase its attractiveness to strategic buyers. Demand for you company's products or services, the appetite for IPOs and acquisitions among both investors and strategic buyers, and other market conditions also will have an impact on your master thesis proposal kth strategy.

Talk with your private equity partner, as well as with any commercial lenders, investment bankers, or other financial professionals, about trends in the marketplace.

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The IPO market has swung back and forth since the dot-com boom in the late s through the bust a few years later and on up to the exit recent economic downturn, during which there were six business capital-backed IPOs in and 12 in — compared with 86 inaccording to the Exit Poll plan by Thomson Reuters and the National Venture Capital Association. But the my dream house essay pmr of venture-backed mergers and acquisitions didn't drop off nearly as much, with in and in compared need inthe report says.

In those periods you either see companies waiting for the market to return or selling to a strategic or financial acquirer. Marketing your company to investors requires a slightly different approach than presenting to potential strategic buyers. Public market investors generally want to understand your company as a strategy -- what your main businesses are, what your prospects for growth are -- while strategic buyers may be more interested in specific parts of your doe that are complementary.

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Even though your pitch may be slightly different, you may wish to pursue both types of exits at the same time to capitalize on the most attractive opportunity. Summit Partners was an investor in GoldenGate Software, which was preparing for an IPO in when the company fielded an acquisition offer from Oracle.

The company ultimately decided to sell rather than go public, Fitzgerald says. Once you know whether your company will be attractive to institutional investors, or whether strategic buyers are actively looking for companies like yours, consider the steps listed above, as well as the price.