Every company should always have a defined “Exit Strategy”.An Exit Strategy defines how the owners and/or principles of a company will realize the full value of the company that they own.A company can realize its full value by either selling itself to another company or by going public and selling shares of ownership on a public stock market.The major components of an exit strategy differ as a function of the Exit Strategy desired.
Sale to Another Company
Marketing Plan
Identify Potential Buyers
Identify Business Brokers
Identify “For Sale” Media
Update the Business Plan
Valuation
Update the Financial Models
Determine Valuation
Professional Support
Engage Legal Council
Draft Appropriate Documents
Going Public
Marketing Plan
Identify Similar Public Companies
Update the Business Plan
Identify the Stock Exchange
Valuation
Update Financial Models
Audit Financial Statements
Determine Valuation
Professional Support
Engage Legal Council
Engage Investment Bank
In either case, in order to realize their “full value” a company must know their valuation.There are many different models to fairly value a company.A company can employ several different Valuation Models, or combinations of them, to determine their fair market value.
