Exit Strategy

In this section, you should clearly demonstrate how the investor will be able to sell the equity that he is buying in your company (remember, he is buying unlisted securities) at a substantial profit. Both debt and equity lenders will want to know how they can expect to receive back their investment  and realise interest and/or profit.

Ideally, investors hope a firm will be so successful that it will be able to go public within five years and their shares will become highly liquid investments, trading at a hefty multiple of earnings. But, often, a more realistic goal is to make the company big and successful enough to sell to a larger firm. State what your exit plan is and be sure it appears realistic.

Click here to learn about the typical exit strategies investors use to realise their gain. If you have any reservations or preference for any particular  exit strategy, you must mention that fact in this section.