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.
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.