Exit

An exit, or exit event, is the liquidity event planned by founders and venture capital investors to sell their equity stake in a startup, realizing profit on the invested capital. There are two main paths to an exit: Strategic Acquisition (M&A), where a larger company buys the startup to absorb its technology or customer base; and an IPO (Initial Public Offering), when the company goes public on a stock exchange, allowing shares to be traded publicly. The exit is the moment when the company's theoretical value (valuation) is converted into available capital. For investment funds, the success of an investment thesis is measured by the return multiple achieved at the time of exit in relation to the initial capital invested.

Practical Example: Após sete anos de operação, uma startup de inteligência artificial recebe uma proposta de compra de uma grande corporação de tecnologia por US$ 500 milhões. Os fundadores, que ainda detêm 40% da empresa, e o fundo de Venture Capital, que detém 20%, decidem aceitar a oferta. Este evento de venda total da empresa é o Exit, permitindo que os sócios recebam seus respectivos valores em dinheiro e encerrem sua participação direta na operação daquela entidade.

Read the book Built to Sell: Creating a Business That Can Thrive Without You, by John Warrillow