11.2. Exit Alternatives

Although equity investment has different profiles (i.e., seed, start up, expansion, replacement, vulture), theory and market trends show no correlation between the stage of investment, the holding period, and the exit strategy. Every deal has a specific strategy with rules driven by the needs of both the investor and the entrepreneur. These are typical exiting strategies relevant to today’s market:

  • Trade sale
  • Buy back
  • Sale to other private equity investors
  • Write-off
  • IPO or sale post IPO

11.2.1. Trade sale

A trade sale exit occurs when the private equity investor sells its stake to a corporation or, for example, to an industrial shareholder. This exiting strategy is often used in European markets. It is based on ...

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