Of all measures of the investment procedure, the exit strategy is definitely the favorite angel of investors and entrepreneurs. The exit strategy is when a venture financier or entrepreneur plans to cash in on an investment. There are various forms of exit plans that investors and entrepreneurs plan out in order to get the profit of investment.
1. Initial Public Offer
For startup commerce, an exit strategy could be the Initial Public Offer (IPO) in which a part of the business is sold to the public in the form of shares. This way, entrepreneurs are compensating investors inside their own startup.
2. Mergers and Acquisitions
Startups can do well with exercising the opportunity to merge with another company if complications with cash flow or liquidity arise. With mergers and acquisitions, the new business stays submerged and delivers safety among investors.
3. Private Offerings
Another exit strategy is to conduct a private proposing of the business' shares to individuals or a group of investors to raise resources, which is more cost operational because brokers are not necessary.
4. Cash Cow
Cash cows are organizations that can facilitate a high market share in an industry subjugated by low growth. They are able to withstand adequate capital to stay afloat and have amplified profits over the years to pay disbursements to investors and shareholders by cashing in on their products.
5. Regulation A+
Regulation A+ is related to IPO. The business owner can put your startup company on an interchange after being eligible. The capitalist can profit from raising money and imitating to particular stipulations laid down by the Companies House.
6. Venture Capital
A good way to secure investors is to keep the cash rolling into the startup. Often, a venture capitalist would spend large sums of money into businesses and startups that are estimated to be worthy of note.
In conclusion, any investor will want the assurance that they will get their money back. Startup businesses need to have an exit strategy to motivate investors to cash in on their investments.