Funding & Investment
Exit
Also Known As
Liquidity EventAcquisitionIPO
An exit is a liquidity event where startup founders and investors sell their equity ownership, typically through acquisition by another company (M&A) or an initial public offering (IPO).
What is an Exit?
An exit is how founders and investors "cash out" their ownership. It's the end goal of the venture capital model—turning equity into actual money.
Types of Exits
-
Acquisition (M&A)
- Another company buys the startup
- Most common exit type
- Can be strategic or financial buyer
-
Initial Public Offering (IPO)
- Company sells shares publicly
- Less common, larger companies
- Highest potential returns
-
Secondary Sale
- Sell shares to private buyers
- Partial liquidity without full exit
-
Acqui-hire
- Acquisition primarily for team
- Often smaller returns
Exit Statistics
Venture studio startups:
- Exit 33% faster than traditional startups
- Average 5 years to acquisition
- Average 7.5 years to IPO
Exit Considerations
- Timing: When is the company ready?
- Valuation: What's it worth?
- Structure: Cash vs stock vs earnout?
- Team: What happens to employees?
Example Usage
“The studio achieved its first major exit when the portfolio company was acquired for $200M.”