exit strategy

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Exit Strategy

1. In entrepreneurship and venture capital, a plan to end one's involvement with a business or investment while making the greatest possible profit (or smallest possible loss). An exit strategy is designed to turn an illiquid asset into liquid cash for the investor. The most straightforward exit strategy is simply selling one's business. If this is impossible, difficult, or unprofitable, another example is discounting one's products to sell as much as possible in as short a time as possible, as in a going-out-of-business sale.

2. In trade, a plan to close a position at a certain point. For instance, a trader may make a stop-loss order in order to close an unprofitable position.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

exit strategy

The method by which an investor plans to cash out of an investment. For example, a venture capitalist may intend to utilize an initial public offering to liquidate an investment in a closely held company.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
He has assembled a panel of experts to discuss Financial Planning and Exit Strategies, a critical topic in today's franchise community.
In her view, poverty management programmes should be complemented by the poverty exit strategies in order to achieve positive impacts on economy and development.
The mission strategy for the ATR is find, create, and promote exit strategies for timeshare owners that works for the entire industry, including: consumers, developers, and resort operators.
In this paper, we examine exit strategies in the contexts of the family firm and the family firm portfolio for several reasons.
Evidence of the shift in exit strategies began to emerge in 2012, when many high-profile investment firms moved away from IPOs and M&As to pursue other cash distribution policies or, in some cases, by extending their investment time horizon beyond three to five years.
Remember, a buy/sell agreement is the most important legal document a business can have that covers exit strategies.
Generally speaking, the more exit strategies you have available to you, the more options you have for getting your money out of the property.
''Now is the time for governments to start coordinating exit strategies from these stimulus measures.
"It is regrettable that so few exit strategies have so far been articulated," it said, reporting that fewer than half of OECD countries had announced clear targets for attacking budget deficits, and the policies to be launched.
In a statement, the bank said, 'The Bank of Israel's experience suggests that the exit strategies can be smoother than expected and market-positive when they come as normalization of monetary policy that confirms a recovering healthy economy.'
Though exit strategies should always be incorporated into proper real estate decision-making no matter what the economic climate, they often take a back seat to options that support growth.
Traditionally, GRATs were used to transfer assets from parents to children with minimum gift tax exposure, but they work wonderfully as exit strategies when the DIGT is the remainder beneficiary.