VC Masterclass: Exits

Learn how venture capitalists and their portfolio companies navigate the various types of exits

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Anton Simunovic

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2 min

Welcome to VC Masterclass, where we help you think like a VC by offering an expert point of view on venture capital investing. Today we’re taking an in-depth look at the ways private companies can exit, and how each path impacts investors.

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At its simplest, the job of the venture capitalist is threefold: Invest money into fledgling tech companies, help them grow, and exit those investments to generate returns — ideally outsized returns — for you, the investor. When it comes to exits, there are typically three paths companies take. In this video, we’ll examine each exit type and how they impact investors and VCs alike.


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The 3 Types of Outcomes for VC Investments

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    Initial Public Offering (IPO)

    First is the Initial Public Offering. This is where a private company registers with the SEC and then offers its stock to the general public.
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    Mergers & Acquisitions

    A much more common exit path is Mergers & Acquisitions, where one company acquires another company for either cash or stock.
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    Liquidations

    The third path to exit, albeit a poor outcome, are “Liquidations” or “Write-offs.” They are not fun and there’s no return, but must still be navigated skillfully.

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