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3.6
Exit Strategy
The exit strategy explains what you intend to do with your
business in the long term. Not everyone is expected to have
an exit strategy, but it is necessary to think about it
in case you plan to look for external investments from Venture
Capitalists or Angel Investors.
Do
a bit of self-introspection to know why you are getting
into business. Will you run it forever and make it bigger
and better for generations, or will you like to sell out
to, say, a multinational and get out to start another business.
Your answers here will define the kind of external investments
you would attract, given of course that you want to attract
them in the first place.
For
example, a venture capitalist will invest in the early stages
of your business in the hope of getting out in 2-5 years
period with a high return commensurate with the risks he
has taken to invest in your company. They like to work with
companies that have plans to go public or can be sold for
big profits.
So,
again assuming that you would want to exit, what are your
options?
- Initial
Public Offering
- Merger/Acquisition
-
Buyout by partner in business
- Franchise
your business
-
Hand down the business to another family member
3.7
Suggested References
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