Venture capitalists only make money if they exit companies successfully, and in this context ‘successfully’ means at a big profit for the investors within a few years of making the original investment. Making a big profit quickly usually means that the company exits at a high valuation relative to its revenues and profits (if indeed there are any profits).
These sorts of exits aren’t achieved by many companies and the term ‘exit strategy’ is a short hand phrase used to describe the analysis that goes into determining how likely a company is to achieve a high value, high multiple exit in a relatively short period of time.
To read the full, original article click on this link: 50 Questions: How does a VC think about exit strategy? « « The Equity KickerThe Equity Kicker
Author: Nic Brisbourne
