Posted: March 31st, 2022

The type of personality needed to succeed

Exit Strategy

 

Entrepreneurship is a risky business and requires a certain type of personality to really succeed at this lifestyle. Every and any business or idea will certainly end when the time is right and it is important for those wishing to exploit profits when to get out of the business. The purpose of this essay is to explore the options that entrepreneurs and investors have to recoup their investments and continue on to the next stage in life. This essay will explore exit strategy options and the considerations that must be taken into account before performing these actions. Ultimately this essay will describe how exiting a business venture is just as important as any other component of the process.

 

Why Get Out?

 

There are many reasons why anyone would want to change something up in their lives, but when it comes to venture capitalism it is important to understand all the implications that accompany such a move. There are many conflicting and interesting reasons why someone would begin retreating away from a business investment. It requires a sense of profit, timing and the ability to take advantage of the current circumstances.

 

With entrepreneurial businesses, it is vital to plan for the future, growing the value and attractiveness of the business by implementing a clear development strategy from the beginning, including putting in place a strong management team to lead the business following the eventual departure of the entrepreneur. Taking an exit is not something which can happen easily overnight and time spent planning for the inevitable and structuring the business correctly should be approached with care.

 

Many times it is difficult for investors to leave their projects. Emotional attachment is very dangerous in the business world and it is important to keep profit margins and victory in mind when deciding to stay or go. Bloomberg (2006) suggested that “Small-business owners and entrepreneurs are involved and invested and personally identified with their businesses in ways that employees in large companies just aren’t. When should they start thinking about retirement? It’s hard to say when, because they don’t feel the same pressure as an employee to retire by a certain age. They make the rules, and they don’t have to retire if they don’t want to. It’s rare for a person to walk away from the business unless they want a child to take over.”

 

It appears that there are basically only two reasons to employ an exit strategy as an entrepreneur. The first is that outside investors want to collect their return. Equity investments are not like loans with interest. The investor sees no return until he cashes out, or the company is sold. Even three years is a long time to wait for any pay check. The next is that Entrepreneurs love the art of the start up and running a business. It is in their blood and engrained in their mind to do this type of work. Assuming a startup takes off, it will probably find that the fun is gone by the time you reach 50 employees, or a few million in revenue. The job changes from creating a “work of art” to operating a “cookie cutter.”

 

For some investors, an exit strategy sounds negative. Actually, the best reason for an exit strategy is to plan how to optimize a good situation, rather than get out of a bad one. This allows leaders to run important startup and focus efforts on things that make it more appealing and compelling to the short list of acquirers or buyers to target (Bernard 2013).

 

Strategy 1: Take the Money and Run

 

One very simple and transparent way to exit a venture capital business is to simply pay yourself out as much as possible before just simply leaving. Bleeding a company dry, may seem like a destructive method, but holds great advantage to the entrepreneur responsible for the start up. Through this type of exit strategy, entrepreneurs usually make the smallest amount because they are selling their business assets and that too at a price buyers are willing to pay. This is called a lifestyle business and investors should realize if their business falls into this category. Robbins (ND) agreed with this idea. He wrote ” rather than reinvesting money in growing your business, in lifestyle companies, you keep things small, take out a comfortable chunk, and simply live on the income. ” There are considerations to this method however: ” If you’re in a business that must invest to grow, taking out too much money can hurt you down the road. Also, if you have other investors, taking too much can upset them.”

 

Strategy 2: Merger

 

A merger is when two companies get together, establish a value on each company, and then combine the two to form one bigger company. In most mergers, the company shareholders receive stock in the bigger company which is presumably worth more than the stock held in each independent company. A merger is a great way to plan an exit because it can significantly increase the business value. For example, two $15 million businesses that join forces can expand much more rapidly into a collective $50 million business five years down the road. At that point, the shares in the merged company will be worth much more than they could have been with the individual business. A merger can also be a partial alternative to business bankruptcy. A larger business can usually acquire the assets of your business without taking on the debt responsibilities, which allows the best parts of your business to continue while only requiring that the debt portion undergo bankruptcy proceedings.

 

Strategy 3: Buyout

 

The most common exit strategy for any business owner is to sell the business to someone else. A sale typically results in the seller of the company receiving cash in exchange for the company. Finding a buyer to take up the business is a great way to exit the game. If you have planned to sell your business, you should focus on developing a transparent and sustainable business structure. It is very important to keep on creating innovative product or technology to take over a particular market so that the entrepreneurs are keener to acquire your business. This exit strategy is common among professional services firms and medical practices. This idea should be considered if the business in question is in a partnership or in a service-related industry. This strategy differs from a merger or acquisition because it is not combining two businesses. This is simply just selling it to someone else.

 

IPO

 

Sell a company to investors through an initial public offering (IPO) is another exit strategy that can be taken up by investors. An IPO is an effective method of recouping investor funds, selling out ownership and gaining funds for future company growth. An IPO is a solid exit strategy for companies to transition from backing by angel investors and venture capitalists to status as a publicly traded company. Even though IPO alternatives for a successful startup seems to be coming back into vogue, it is relatively rare. After a record low of 39 U.S. IPOs in 2008, the market was up to a still trivial 159 in 2011. Even in most of these cases, the original startup founders were pushed out, or heavily supplemented, with experienced executives.

 

The strategy sounds the best one but it is a lengthy process. IPO attracts a lot of attention and they take years to build a business that can go public and then years more to prepare it for Initial Public Offering. This exit strategy brings the maximum pay out but it becomes the most expensive one as well as you will have to spend millions to obtain an IPO. It also involves several restrictions to achieve liquidity through IPO so if you own a small business, experts suggest you must consider another business exit strategy rather than this. At the same time, you cannot control when the market is strong or weak so it is hard to plan IPO for a business ( Faust 2008).

 

References

 

Anonymous. (2006, July 24). For Small-Biz Owners, It’s Tough To Let Go. Business Week, 3994. Retrieved from http://www.businessweek.com/magazine/content/06_30/b3994407.htm.

 

Burrows, P. (2010, February 15). Hot tech companies like Yelp are bypassing IPOs. Business Week Online, 4166, 23. Retrieved from http://www.businessweek.com/magazine/content/10_07/b4166023271880.htm?chan=ma gazine+channel_new+business.

 

Faust, D. (2008, May 26). The perils of going public. Business Week, 085. Retrieved from http://www.businessweek.com/magazine/content/08_21/b4085064750402.htm.

 

MacMillan, D. & Burrows, P. (2009, November 2). The app economy. Business Week, 4153. Retrieved from http://www.businessweek.com/magazine/content/09_44/b4153044881892.htm.

 

Thornton, E. (2008, November 25), How Private Equity Strangled Mervyns. Business Week. Retrieved from http://www.businessweek.com/stories/2008-11-25/how-private-equity- strangled-mervyns

---

Get Professional Assignment Help Cheaply

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

• Plagiarism free papers
• Timely delivery
• Any deadline
• Skilled, Experienced Native English Writers
• Subject-relevant academic writer
• Adherence to paper instructions
• Ability to tackle bulk assignments
• Reasonable prices
• 24/7 Customer Support
• Get superb grades consistently

 

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

• When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
• We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

• The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
• We will have a different writer write the paper from scratch.
• Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

---