An exit strategy in an equity financing is of significant importance for the investors and owners of businesses to outline at what point they would eventually liquidate investments. The two most common exit strategies are acquisitions and Initial Public Offerings, or IPOs. Here's how each works in the context of equity financing along with main considerations for preparing in advance for either.
1. Acquisition Exit Strategy
An acquisition is when a company is acquired by another entity, wholly or partially, the process that also allows investors and founders to receive quick returns often as a very high one.