Exit Strategy: How Owners and Founders Prepare Their Exit

An exit strategy is the planned exit from your own company: it defines to whom you sell or hand over, when, and on what terms. Owners who answer these questions only when the exit becomes urgent negotiate from the defensive. Those who answer them two to three years ahead choose timing, buyer pool and price range themselves.

The term comes from the startup world. But it concerns every owner — from founders with investors to owners of established businesses.

What is an exit strategy?

An exit strategy answers three questions: Who takes over the company (buyer, successor, investor)? When is the exit planned? And what should it deliver for the owner — purchase price, an orderly handover, or both? It is not a document for the drawer, but a working plan with a timeline.

Without this plan, chance decides. An unsolicited offer, a health issue, a shareholder conflict — and suddenly the exit runs under time pressure. That is exactly when the price drops.

Which exit options exist?

The main exit routes are the sale to a strategic buyer, the sale to a financial investor, a management buy-out (MBO) or buy-in (MBI), family succession and — rarely — an IPO. Which option fits depends on size, industry and your personal goals.

Exit route	Suited for	Typical outcome
Strategic buyer	Established companies with market position	Often highest price, full handover
Financial investor	Companies with growth potential	Partial or full sale, possible reinvestment
MBO / MBI	Businesses with strong management	Continuity, discreet process
Family succession	Family businesses with a successor	Handover instead of sale, often mixed financing
IPO	Very few, large companies	Partial exit via capital markets

Knowing the differences between buyer types improves your negotiation. See Strategic Buyer or Financial Investor.

When is the right time for the exit?

The best exit timing is where three lines converge: the company is growing and not dependent on its owner, the market pays good valuations, and you yourself are ready to let go. Selling works best from strength — not when the numbers are already turning or retirement is pressing.

This sounds obvious, yet is rarely followed. Many owners hold on until growth flattens — and are surprised by declining offers.

For the succession perspective, see When is the right time to hand over?

How do SMEs, startups and family businesses differ at exit?

An SME sells substance: earnings, customer base, market position. A startup sells future: technology, growth, team. A family business additionally hands over responsibility — to family, employees or externally. The exit strategy must fit the type, otherwise you approach the wrong buyers.

For SMEs, sale readiness is decisive: clean numbers, documented processes, low owner dependency. How to get there: Preparing a Company Sale.

For startups, the trade sale is the standard case — the sale to another company. According to KfW Research, more than half of German startups sold since 2005 went to foreign buyers, nearly a quarter to the USA. The specifics are covered in Startup Exit.

For family businesses, the exit is often not purely a sale question. For the available routes, see Succession Options.

How long does an exit take?

Plan for 12 to 24 months of preparation, followed by 6 to 12 months of sale process — from buyer outreach to closing. With structured preparation and a well-run process, the transaction phase can be condensed to 3 to 6 months.

A structured process protects more than the timeline: it protects value and negotiating position. If a sale becomes known too early, it unsettles employees, customers and suppliers.

What belongs in an exit strategy?

Target date, preferred exit route, realistic value range, a list of potential buyer groups and an action plan towards sale readiness. Plus the personal level: what comes after the exit — advisory board, reinvestment, retirement?

Do I need an exit strategy as a small company?

Yes — especially then. Small companies depend more on their owner; without preparation, the business is often unsellable. The alternative is closure — which destroys value that two to three years of lead time would have preserved.

Can I change an exit strategy later?

Yes. An exit strategy is a working document, not a contract. Market conditions, offers and personal goals change — the plan gets adjusted. What matters is that it exists: those who adjust a plan stay in control; those without one merely react.

Selling a company is the most important transaction of an entrepreneur's life. Get independent, discreet guidance — IGCP Capital Partners. → igcp.at