An exit is the sale or transfer of part or all of a company, converting founders’ and investors’ illiquid holdings into proceeds under agreed terms. It should be considered early, because the route affects governance, shareholder rights, financing, and future transfer restrictions.

Common exit strategies

• Merger: two or more businesses combine to form or join a larger enterprise, subject to corporate approvals and transaction terms.
• Initial public offering: shares are offered to public investors through a regulated market, if eligibility, disclosure, and listing requirements are met.
• Acquisition: another company purchases some or all shares or assets, under negotiated conditions and required approvals.
• Secondary sale or buyout: an investor’s stake is acquired by another shareholder or third party, subject to transfer rules and consent rights.

Preparing for an exit

1. Define the shareholders’ objectives and acceptable timing.
2. Review articles, shareholder agreements, pre-emption rights, drag/tag provisions, and transfer restrictions.
3. Maintain reliable accounts, corporate records, licences, contracts, and intellectual-property ownership.
4. Assess valuation, tax, regulatory approvals, employee matters, and liabilities.
5. Prepare for due diligence and negotiate price, representations, indemnities, and closing conditions.

An exit does not guarantee a return; the result depends on the company’s performance, market conditions, transaction structure, and agreed allocation of proceeds. Early planning can reduce disputes and delays. Obtain legal, financial, and tax advice tailored to the company and applicable rules.