An ‘exit’ refers to the strategy by which founders, investors or shareholders sell all or part of their stake in a company. This typically takes the form of a sale of the company, a merger, a takeover or an initial public offering (IPO).
An exit is often a key milestone in the life cycle of a start-up, as it offers the opportunity to realise the value created by the business.
Typical exit options include:
- Sale to another company (trade sale)
- Takeovers by investors or private equity firms
- Initial public offering (IPO)
- Secondary Sale (sale of shares to new investors)
- Management buyout (MBO)
An exit serves several purposes:
- Realising the value of the business for founders and investors
- Liquidity event for shareholders
- strategic development or scaling up under new ownership
- Reinvestment of capital into the investment cycle
- Conclusion of a successful growth cycle
Planning your exit at an early stage is important in order to:
- Aligning the corporate structure and shareholdings accordingly
- to identify potential buyers or investors at an early stage
- to increase the company’s value in a targeted manner
- to optimise the legal and financial framework
- To secure room for manoeuvre in negotiations
For start-ups, an exit is not an isolated event, but is often the result of long-term strategic decisions and consistent scaling.
innoWerft helps founders to consider exit strategies at an early stage, increase the value of their businesses and prepare specifically for sale, takeover or IPO scenarios, with a view to facilitating sustainable and successful transactions.