Business Terms Glossary

Exit Strategy

Definition of Exit Strategy

An Exit Strategy is a company's intended method for liquidating its holdings to achieve the maximum possible return to investors and founders.

Exit strategies depend on the exit climates including market conditions and industry trends. Exit strategies can include selling or distributing the portfolio company's shares after an initial public offering (IPO), a sale of the portfolio company or a recapitalization.

If you are an entrepreneur who is looking to raise capital, it is very important to discuss viable exit strategies with prospective investors. Investors like entrepreneurs that are focused on an exit strategy.

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