An exit occurs when an investor sells part or all of his or her ownership. In a healthy or growing company, an investor may exit to gain a return on investment. In other cases, the investor may simply want to access cash to invest elsewhere.
Investors can exit by:
- Selling shares to another investor (or investors)
- Merging the company they’re invested in with another company
- Selling the company to another company
- Issuing shares through an initial public offering