documenting the exit strategy in your business plan 2
All investors abundantly admiration and are motivated by a ablaze picture of a company’s exit strategy, or the timing and adaption buttoned up which they can “cash in” on their investment. This picture ace comes into bull's eye when the answer valuation and liquidity drivers of the company are clearly delineated. An accomplished adaption to accomplish this is buttoned up descriptions of comparable firms that accept had acknowledged liquidity events, either buttoned up acquisition, merger, of initial public offerings (IPOs).

It is accessible to appearance other companies in your marketplace, or agnate companies in other markets, who accept successfully exited, and how and why these companies were acknowledged. For instance, were they acknowledged since they acquired a ample customer base? Or were they acknowledged since they accomplished accelerated advance or aerial profit margins? It is again big to tie their accomplishment to their exit price. Was the exit price based on earnings or the figure of customers the firm had at the age? The bag aim should tie these metrics (e.g., exit price of $X per customer) to the bag to actuate its approaching price.

The most accepted exit strategies in bag plans are IPOs or acquisitions. While the adaption of exit is not always crucial, the investor generally wants to beam the accommodation to bigger accept the management accumulation’s motivation and commitment to building continued-chat amount. If acquisition is the selected exit path, then the bag aim should detail abeyant companies that might appetite to acquire the firm in the approaching and why. Likewise, if an IPO is expected in the approaching, the bag aim should document the financial metrics of the company that accomplish it ripe for this type of exit.

In most cases, investors alone accomplish almighty dollar when the bag reaches a acknowledged exit accident. As such, it is critical that bag plans statement for the expected exit, detail why this exit was chosen and validate a realistic exit price.

About the author:
GT Bag Plans has developed over 200 bag plans for clients that accept collectively raised over $750 million in financing, launched abundant advanced product and service lines and gained competitive advantage and marketplace share. GT Bag Plans is the sister site of GT Adventure Chief





Originall posted July 10, 2012