Definition
Exit
An exit refers to the process by which investors liquidate their investment or dispose of their assets in a financial venture. This is a crucial aspect of venture capital investments, as it allows investors to realize returns on their investments.
An exit occurs when an investor sells part or all of his or her ownership. In a healthy or growing company, an investor may exit to gain a return on investment. In other cases, the investor may simply want to access cash to invest elsewhere.
Investors can exit by:
- Selling shares to another investor (or investors)
- Merging the company they’re invested in with another company
- Selling the company to another company
- Issuing shares through an initial public offering