How To Reduce Risk With An Effective Exit Strategy

11 Reasons to Execute an Exit Strategy

The following are generic reasons to exit a venture or business before debts stack up and recovery becomes impossible. The idea here is that we foresee an impasse before it becomes a disaster from which recovery is futile. As we go through the reasons to initiate your exit strategy, imagine how the given scenario might apply to your business. Your exit strategy will be a method or a timing by which you land your plane safely and walk away… rather than flying into a cliff.

  • Merger — This is when one organization absorbs another. You and the acquiring company may agree on terms such as whether or not you will continue to manage your absorbed organization. When the merger is complete, the acquiring company will maintain its previous brand and image.
  • Consolidation — Here, the two companies join to form a new company.
  • Acqui-hire — In this scenario, the purchasing organization takes on key employees as a mass-hire agreement. All other assets can be sold off or traded in a way that is commensurate with the terms of the acqui-hire
  • Management Buyout — Here, the management of one company buys a controlling share of your company.

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Michael DeBlis

Michael DeBlis

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Michael is an attorney specializing in entertainment law and a professionally-trained actor. He is a partner in the law firm of DeBlis Law.