At some point every entrepreneur faces the question of how to turn their stake into cash. Three routes dominate: selling to a strategic buyer, the IPO, and selling to a financial investor. Each has its own pros and cons, and the right choice depends on your goals and the market.
The trade sale: selling to a strategist
The trade sale is the most common exit in the mid-market. You sell to a strategic buyer, often a competitor, supplier or customer. The advantage: strategists frequently pay a premium because they can realise synergies. The challenge lies in selecting the right buyer and running a professional process.
The IPO: the royal road?
Going public is seen as the crowning of a company's history. In reality, the IPO suits only a few, mostly larger companies with a convincing growth story. The advantages are high valuation, liquidity and prestige, offset by high costs and dependence on the capital market environment.
The secondary: selling to a financial investor
In a secondary, existing shareholders sell their stakes to a financial investor such as a private equity fund. This is attractive when only part of the shares are sold or management stays on board. The seller gains liquidity without fully giving up control.
How to choose the right route
The decision starts long before the actual sale. A well-thought-out exit strategy considers your personal goals and the market. We recommend tackling it early, as our article planning your exit strategy in time explains. Professional support with the company sale often raises the proceeds. For larger deals a fairness opinion protects those responsible.
FAQ
Which exit yields the highest price? It cannot be said flatly. Competition among several bidders is decisive.
How long does an exit process take? A well-prepared trade sale takes six to twelve months; an IPO often longer.
Can I pursue several options in parallel? Yes, the dual-track process keeps trade sale and IPO open.