Entrepreneurs in Illinois and throughout the country should not be afraid to get creative when it comes to creating an exit strategy. In some cases, selling pieces of a company over a period of time can be more effective than selling the entire company in one transaction. By selling in pieces, it may be easier to offer investors larger returns while also maximizing cash flow.
By building a company that focuses on multiple channels at once, those channels can be designed to be sold on their own. This is important because many companies that look to acquire a startup are only interested in one piece of technology or one idea in particular. If an entrepreneur insists on selling the entire company to a buyer, it can result in offers that are less than what the owner or owners think the business is worth.
This can lead to a situation where a company simply runs out of money before it can be acquired because it takes too long to do so. For investors, this can be problematic because they generally only get their money back when a company is acquired or chooses to go public. Fortunately for startup founders, they can craft an exit strategy that meets their needs even it is unconventional.
When in the business formation and planning phases of a startup company, it is generally a good idea for its founders to consider their exit strategy. This may make it easier to find investors or make other decisions about how the company grows and evolves over time. An attorney may be able to help create founder agreements or review agreements with investors. A legal professional may also be helpful in other matters such as doing trademark searches or resolving disputes with vendors, employees or other parties.