1	Exit Strategies
2	When Is an Exit Strategy Needed Owner/Entrepreneur cashing out No succession Monetisation Investor liquidity Private Equity/Venture Capital exit Plan the strategy early
3	Possible Exit Routes Sale to Strategic or High Net Worth Investor Sale to Owner Management Buyout Merger & Acquisition Transaction Initial Public Offering
4	Issues to Consider when Choosing an Exit Strategy Sale to Strategic Investor Look for one who can assist the company in executing its growth strategy Local, Regional or Conglomerate with deep pockets and market channels Sale to Owner under pre-emptive right Ability to raise finance at the time Management Buyout Must be credible and capable management team Ability to raise finance Debt capacity of business – leveraged buyout Merger & Acquisition Transaction Competitive tender drives up the price Local or Cross-border Stock swap Build value for the company from start-up Differentiation Building efficient systems that can integrate easily Unique capability that provides market advantage Strong customer base or sales channel
5	Issues to Consider when Choosing an Exit Strategy Initial Public Offering The market is bullish now, so listing multiples are high, valuation is critical Multiple must be sustained (PEG ratio near to 1), so consistent growth and performance is critical Listing price must leave something on the table, yet satisfy the PE firm Have a clear communication strategy for managing investor relations – identify spokesperson (s) Give accurate transparent information, don’t baffle them with data Develop a credible consistent story Choose a good underwriter to assist you on timing Prepare early - IPO timelines range from 6 to 12 months of detailed planning
6	Be Prepared, Plan Early……… Identify the exit route early and plan for it Build flexibility into the exit structure Lower upfront, higher exit Staged exit Build the business to maximize value at all times – the PE firm must exit higher than entry Investment from a PE firm is like a marriage – choose someone with same goals and motivation for the business Timing is everything – consider economic and financial performance, sector outlook, management track record for executing strategy