1)
My exit strategy would be completely dependent on the stability of cash flows
and opportunity for growth after 5 years. If there is still a large opportunity
to grow, I would probably sell a portion of the equity of my business so I
could receive a check but still have a large interest. I would also take on new
debt as growth capital and then sell the other portion of my equity after that
debt is paid off. If there wasn’t much more opportunity for growth but the
company had stable cash flows, I would do a dividend recap so I could get a
large check then cash out after about 5 more years.
2)
Either one of these strategies results in my receiving a pretty large check in
five years then potentially much more later on. Obviously, the company has to
succeed first but I could then use that check to invest at a moderate rate of
return and retire when I’m 40.
3)
Aiming for a quick exit has probably influenced my need for venture capital the
most. I would want the company to get off the ground as quick as possible and
would not want to wait around while I try to self-finance the company.
I’m glad you were able to identify that most small businesses do not last forever and mature a lot faster than large corporations. It is always the safer move to make profit and sell the business at your peak, but if you are interested in taking on large corporations, it takes several years, dedication, and uniqueness for a small business to topple a corporation.
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