exit strategy

Means by which investors in a company plan to receive a return for their investment. Exit strategies vary according to the type of investor. Venture capitalists (VCs) usually require a quick return on their investment. Ideally this will be by IPO. However, if the economic climate or business is not suitable they will seek a trade sale, MBO, or merger. VCs may even seek to force their preferred strategy through against the wishes of management if they have sufficient voting power. In extreme cases VCs may seek liquidation of a company's assets in order to safeguard their investment.

Angel investors, often private investors, may have a more relaxed attitude towards timescales, being prepared to wait longer to see a return on investment.