Definition of Exit strategy:
A preplanned means of extricating oneself from a situation that is likely to become difficult or unpleasant.
Timing and means with which an investor (usually a venture capitalist) cashes the investment in a startup venture or a buyout arrangement. It is often planned with, and agreed upon, by the management of the investee firm and commonly occurs after an initial public offering (IPO) by the startup. See also harvesting strategy.
An exit strategy may be executed to exit a non-performing investment or close an unprofitable business. In this case, the purpose of the exit strategy is to limit losses.
An exit strategy is a contingency plan that is executed by an investor, trader, venture capitalist, or business owner to liquidate a position in a financial asset or dispose of tangible business assets once predetermined criteria for either has been met or exceeded.
How to use Exit strategy in a sentence?
- An exit strategy, broadly, is a conscious plan to dispose of an investment in a business venture or financial asset.
- Trading exit strategies focus on stop-loss efforts to prevent downside losses and take-profit orders to cash out of winning trades.
- Business exit strategies include IPOs, acquisitions, or buy-outs but may also include strategic default or bankruptcy to exit a failing company.
- It is vital that all investors have some sort of exit strategy.
Meaning of Exit strategy & Exit strategy Definition