The means by which a private equity firm realizes a return on its investment. For venture capitalists, this typically comes when a portfolio company goes public, or when it merges with, or is acquired by, another company. More often an exit is performed by a Trade Sale, secondary purchase or Buy-Back.
The means - such as a public share issue or corporate acquisition - by which capital gains on investments are realized at the end of the investment period [go back to glossary list
This is an liquidity event, or series of events, that allows a VC firm to turn the equity it owns in a company back into cash. That event is usually a sale of the company to a larger companycorporation, or an IPO that permits the firm to sell its shares. Typically, the VC cannot exit at the time of an IPO because they are "locked up" by the investment banks executing the IPO [see "lock up"].
The way a shareholder gets his/her money out of the venture; or The vehicle for selling the enterprise; or What venture capitalists look for when funding new ventures--their way to realize the dollar profits from the investment. See Creating Your Pitch: Exit Strategy.
The Opportunity for investors to realise (i.e. sell) their investment. Normally, the exit from investment in a private company occurs either through a trade sale of the company or through its flotation on the stock market. A good exit benefits both the individuals who launched the business and outside investors who back them. (Some of these outside investors look for a quick exit, some take a longer view). See short termism .
Transfer of a share via a Private Equity structure: either by a listing on the stock exchange, or by a transfer to another company ("trade sale").
Private equity professionals watch for the exit from the beginning of the business plan. An exit is the means by which a fund is able to realise its investment in a company. This could be in the form of a buy out, IPO or trade sale.
Liquidation of holdings by a private equity fund. Among the various methods of exiting an investment are: trade sale; sale by public offering (including IPO); write-offs; repayment of preference shares/loans; sale to another venture capitalist; sale to a financial institution.
Divestment of a portfolio company through placement of shares: share buy-back, trade sale, secondary (placement with another private equity fund), IPO (going public
The sale of equity or ownership in the enterprise for cash.
Ending a private equity provider's involvement in a business venture with a view to realising an internal return on investment. Most common exit routes: Buy back, Trade sale, Secondary purchase, Going public.
The point at which the financier sells his holding in the buy-out company, either through a trade sale to a larger company, by the management buying out the other investors to assume complete control, or by a stock market flotation.
The point at which the institutional investors realise their investment. Venture capitalists may, depending on the business and their own situation, look to achieve an exit in anything from a few months to 10 years. Exits generally occur via trade sales, secondary management buy-outs and flotation on the stock market or by write-off if the investment ends in receivership.
The opportunity for investors to sell their investment. Normally, the exit from investment in a private company occurs either through a trade sale of the company or through its flotation on the stock market. When raising finance, the opportunity to exit will be a key part of the investors' assessment.
The sale or exchange of a significant amount of company ownership for cash, debt, or equity of another company.
One of the key concerns of venture capitalist. Typically, the fund has a specified duration, and in order to take the profits that the venture fund develops in the company, they must sell or in some way reduce their interest in the portfolio company. This process or stage of investing is considered the "exit" or "cashing-out."