Exit
Definition
Exit: An exit is an event that allows startup investors and shareholders to convert their equity into cash. Common exits include acquisition by another company, IPO (going public), or secondary sale. Exits are how investors and employees realize returns on equity.
Example Usage
“Our Series A investors saw a 10x return when we were acquired for $500M.”
Common Misconceptions
Related Terms
Acquisition
An acquisition occurs when one company purchases another, either for cash, stock, or a combination. For startups, being acquired is a common exit path...
IPO
An Initial Public Offering (IPO) is when a private company offers shares to the public for the first time on a stock exchange. IPOs provide liquidity...
Liquidation Preference
Liquidation preference determines how proceeds are distributed when a company is sold or liquidated. Investors with liquidation preference get paid be...
Secondary Sale
A secondary sale is when existing shareholders sell their shares to other investors, rather than the company issuing new shares. This provides liquidi...
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