What is "Exit Strategy" meaning?

An exit strategy is a planned approach for a business owner or investor to sell their stake in a company or liquidate assets. It is a crucial part of business planning, especially for investors and entrepreneurs who want to ensure a profitable exit. Common exit strategies include selling the company, merging with another company, or going public through an IPO.

Example

"The entrepreneur outlined a clear exit strategy, planning to sell the company to a larger competitor after five years of steady growth."

How is "Exit Strategy" used in business?

In business, an exit strategy helps owners and investors understand the best ways to maximize their returns when it's time to leave or sell the business. It helps in decision-making regarding company growth and investor expectations.

Pro Tip

It's important to have an exit strategy in place early in the business lifecycle, as it can influence decisions regarding funding, partnerships, and long-term goals.

Related Terms

Mergers and Acquisitions, IPO, Business Valuation, Buyout