​What are the reasons for entrepreneurs/shareholders to perform an Exit?

 

There are several practical reasons why entrepreneurs make an Exit.
However, it is important to know that each and every Exit target, must be accompanied by the right Exit strategy.

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Throughout the years, via our investment division, we met company owners who seek for investment under a partial or complete exit strategy.

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We have gathered below the main reasons why entrepreneurs are looking to make an exit:

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1. A loss of interest in the business – many entrepreneurs love the art of a new startup, but following some years of activity and following their long-term experience in the business, they are ready for the “next challenge”, eager to start a new business and a new business adventure.

2. Market changes and losing track of the new technology – The market is changing all the time, while new technologies appear and “old - traditional” businesses stay behind.
   It’s time to look for a way to exit your business and try to optimize the profit before it will be dissolved.

3. Financial situation – The business gained success and had potential, but it was struggling with financial difficulties. In such a situation, the owners seek a new solution, financial support and "new blood" in the company. In many cases, they will face a challenge in bringing the company towards eligibility for an exit (In which the MCBA team can contribute and support as well)

4. Health issues – At some point, the company owners may face deteriorating health, which is not allowing them to perform in their actual business anymore.
   In many cases, the business requires the direct involvement, performance, and activity of the shareholders to continue and grow.

5. Retirement – the owners feel that their age is no longer suitable for the specific type of business they are operating in. It's marked out as the finish line for them and it's time to move on.

6. No Next-generation – the company initiators may have performed successfully throughout the years, but it’s about time to finish and relax. However, when the next generation is not there or is not willing to continue the business, the owners face a situation of losing the fruits of a great business without any continuation.

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In all the cases we mentioned above (and more) an Exit can be a wonderful solution, but only when it’s done in a professional manner that will protect the seller and create an optimized profit scenario both in the immediate and in the long run.

In some cases, an Exit process can be also done partially (by selling a minority / majority part of your shares), it is not an obligation to leave / disconnect from your business.
The options are to continue and stay an active party within your company’s operational activities or to Exit totally.

 

If you feel one of the scenarios above matches your situation and you seek to exit from your company, contact us to see how we can assist you.

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