| name | design-exit-strategy |
| description | Use when planning or evaluating how to exit a business — e.g., "how do I sell my company?", "M&A vs. IPO?", "what's my business worth?", "how do I prepare for acquisition?", "strategic vs. financial buyer?" |
| source | Damodaran "The Dark Side of Valuation" (2009); McKinsey "Valuation" (Koller, Goedhart, Wessels, 7th ed.); PitchBook M&A data (2023); Bain "Global Private Equity Report" (2023); Investment Bankers Association M&A process guides |
| tags | ["finance","corporate","exit-strategy","M&A","IPO","acquisition","valuation","liquidity"] |
| verified | true |
Design Exit Strategy
Evaluate exit options (M&A, IPO, secondary sale, PE recapitalization), optimize company positioning, and execute the highest-value exit path.
Why This Is Best Practice
Adopted by: Every investment bank (Goldman Sachs, Morgan Stanley, Lazard) runs M&A advisory as a core business. The CFA Institute covers M&A valuation as a required Level II topic. PE firms (Blackstone, KKR) have dedicated exit planning teams; their portfolio companies plan exits 18–24 months in advance.
Impact: PitchBook (2023) data shows that companies that run a competitive sale process achieve 15–30% higher valuations than those that accept unsolicited offers. McKinsey research on M&A shows that sell-side preparation (clean financials, audited EBITDA, clear growth narrative) reduces deal close time by 40% and improves final price by 10–15%.
Exit is the terminal event that converts years of value creation into realized proceeds. Without a strategy, founders default to the first offer received — typically below market. A structured approach determines which exit type maximizes value for the founder's specific situation (tax, control, speed), prepares the business to be a compelling acquisition target, and runs a competitive process to establish true market value.
