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How To Become A Business Angel: Practical advice for aspiring investors in unquoted companies by Richard Hargreaves

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Chapter 11: General Principles of Exits and IPOs

What is an exit?

An exit (sometimes called a liquidity event) is an opportunity for investors to sell shares in the business they have backed. It does not always mean they will make a profit. There are several types of exit:

1. Flotation or IPO

This is often cited as the holy grail. Regrettably, in the UK it is nowadays a rare exit for an early-stage, growth business.

2. The sale to a trade buyer or private equity

This is by far the most likely exit you will experience.

3. A partial sale

This involves selling only a percentage of the company and means the shareholders continue to have an ongoing interest.

4. A distressed sale

Sometimes investors sell a business because ...

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