KPMG tackles the exit strategy dilemma.
In a recent article titled "What exit strategy is best for your company?", KPMG partner Aamir Husain and Managing Director Bill Welnhofer discuss the important question of exit strategies. Young companies seeking to raise capital or to return funds to investors need to choose the most financially savvy path. An IPO is a viable exit strategy, but is a complex process that means the company will forever need to meet stringent regulatory requirements and public scrutiny. With that in mind, companies should analyze the other paths that lead to liquidity, including sale to a strategic or financial buyer, a debt offering, or a minority equity sale. The benefits and risks of each of these paths are discussed in the article.
In general, the decision of what strategic option to pursue is a complex one that will be affected by general market conditions, as well as the individual business needs of the company and its investors. Industry specific issues will also need to be considered. Ideally, a company should keep all options open in order to pursue an exit strategy most favorable to all stakeholders under the circumstances.