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Part: VI Helpful References > Creating an Exit or Payback Strategy

Creating an Exit or Payback Strategy

You don't get something for nothing. Individuals or organizations who invest in your company want a way to recoup their investment—and make a profit in the process. This is known as an exit strategy. They're putting money in at some risk and want to know how they will be rewarded. Equity investors, those to whom you sell shares of your company, hope that your company is successful and can go public (selling a portion of your company shares to individuals or institutions on the open market) within five years, or at least they hope to make the company successful enough that a larger company buys or merges with your company at a substantial value.

But don't automatically assume your company has the potential to go public. More importantly, don't fail to devise and fully describe in your business plan an exit strategy for your company.



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