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Financieel Management

It may seem to be the wrong way round, but thinking about the exit strategy early on in the process is sensible.

For certain the investor will sooner or later seek an exit and it is important for management to choose a backer with a matching investment horizon. In general, investors will want to exit in a period of between 3 to 7 years.

Of course, the exit is not only about the investor realising his investment, management will also wish to capitalise on their success at a certain point in time. The Shareholders’ Agreement usually includes provisions relating to the exit.

The investors will generally have ‘take along’ rights which give them the possibility to enforce a listing or sale of the business. Sometimes the intended investment horizon is stated in the agreement as mutual consent.

In practice, exit timing is a function of shareholder wishes, shareholder value, economic and market conditions, the characteristics of the business itself and strategy; with the management often driving the process.

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