CEOs and founders of startups should think about their startup exit strategies while creating a company plan. Having a startup exit strategy in place is important, regardless of whether business is booming or the company is among the 90% of startups that fail.
This is because it can assist owners or investors gain more profit when the business succeeds or prevent the worst-case losses if the company is failing.
However, what exactly is an exit plan, and why does it matter to investors and companies alike? Here’s what you should know about startup exit plans, including buyouts, bankruptcy, and initial public offerings.
What Is a Startup Exit Strategy?
When a startup company’s owner (and investors) sell their ownership or stock for a profit or a loss, it’s known as a startup exit. An all-encompassing plan used by the owner(s) to steer the business toward a successful stock sale is known as a startup exit strategy.
To …