Exit Strategy is a contingency plan that helps to disengage from a potentially difficult situation. Exit Strategy is a planned approach that often proves a boon for business owners, venture capitalists, traders, and investors for disposing of tangible business assets. Reasons for Exit Strategy - Non-performing asset or unprofitable business - The business venture has run its course and returned the desired profits - To deal with changes in the market - Legal issues like a tangible lawsuit - Retirement of a business owner Types of Exit Strategy 1. Liquidation Business shut down 2. Liquidation over time All the profits have been withdrawn from the business 3. Management buyout Executives have gathered all the resources a business has and acquired all or part of the business they have been running 4. Selling Business to manager/employees The manager or the employees are already familiar with the functioning of the business and opt to buy it and become its owners 5. Selling the business in an open market Business entities especially small business unit owners sell the business to the one who pays the desired price 6. The IPO IPO can bring good returns in the right market 7. Family-specific transaction This personal strategy involves handling the business reins to a family member 8. Enforced liquidation, bankruptcy, and reorganization The original owners have no control over the management or ownership process Importance of Exit Strategy 1. Keep the business entity prepared in case of closure 2. Build relationships and help in signing important contracts 3. Investors often opt for firms that have a business strategy 4. A good exit strategy leads to a smooth transition, safeguarding wealth and attracting talent Examples 1. Sachin Bansal Founder of Flipkart 2. Binny Bansal Founder of Flipkart 3. Ashish Kashyap Founder of ibibo Group 4. Abhijit Bose founder of ezetap This video is on Exit Strategy and it has the following sub-topics. Time Stamps 0:00 Introduction 00:21 What is an Exit Strategy? 00:46 Reasons for Exit Strategy 01:56 Types of Exit Strategies 04:26 Importance of an Exit Strategy 05:14 Exit Strategy Examples