Newsletter: Exit strategies – a quick guide

We’re all about the exits in today’s newsletter. So, join us for an in-depth dive into the world of exit strategies.

We’ve also got exciting details of our new TV, media & entertainment services, inspiring updates from our clients and our fantastic Refer a Friend scheme!

Two-minute masterclass: Exit strategies for founders & start-ups

Need to know: Every founder, investor and start-up business owner needs an exit strategy. This strategy will guide how they plan to leave a business. Its goal is to maximise profit (or minimise losses) by exiting in the right way and at the right time.

The big 7: These are the seven most common exit strategies and their main pros and cons:

1. Initial public offering (IPO).

Private business ‘goes public’ by selling shares and becoming listed on a stock exchange.
+ Can raise significant capital & aid business growth.
– Can be slow and costly. High scrutiny & reporting requirements.

2. Mergers and acquisitions (M&As).

Business is bought out or merged with an existing business.
+ Often highly profitable, particularly if selling to a competitor or a competitive tender process is entered into.
– Can be time-consuming and costly with uncertainty for staff/board.

3. Management and employee buyouts (MBO).

Sale of the business to management team or employees.
+ Quick, with minimal disruption.
– May be no suitable buyers.

4. Selling to a ‘friendly buyer’.

Sale to a business partner, investor, family member, friend, customer or colleague.
+ Quick, with minimal disruption.
– Can be challenging on relationships and may lead to lower sale price.

5. Acquihires.

Buyout to acquire a company’s skilled workforce.
+ Can be lucrative – talented staff are highly valued and will be protected by exit.
– Can be difficult to source and costly to set up and execute.

6. Liquidation.

Sell off of assets (property, infrastructure, equipment etc) to settle debts.
+ Relatively quick.
– Low-value exit and implications for employees, partners and customers plus reputational damage.

7. Bankruptcy.

A declaration of bankruptcy. Assets are seized to repay debts.
+ Ends liability for business debts.
– Implications for employees, partners and customers, reputational and credit damage for business owners.

An independent business valuation and legal advice is an essential starting point in selecting the right exit strategy for your circumstances.

Give me more!
If you’re hungry for more exit-based knowledge we’ve got plenty.

For the detailed guide to each of the 7 main types of exit, plus tips on preparing for exit, check out 7 exit strategies for founders and start-up business owners.

To discover how early exit planning can help your business throughout its lifecycle, check out Don’t miss your exit – 5 reasons for early exit planning.

Next time...

Next time in two-minute masterclass: SEIS and EIS

Your legal navigator into the worlds of TV, media & entertainment, and digital

From corporate media, to the fast-paced arenas of social media, online communities, and gaming, to the growing virtual and augmented worlds, our experienced lawyers are here to navigate the way with you. We can draft and negotiate a distribution or license agreement and advise you as you cross over into digital galaxies where no one has gone before.

Our practical and experienced team will come up with hands-on solutions to help your business grow. We’ve already worked with clients including Metavision (part of ITV’s Studio 55 Ventures), Equality Group and Trinity Sports Management in this area.

Contact us today to speak to our TV, media & entertainment expert, Bart.

Great news from our clients

Some fantastic news from Patchwork. They’ve raised a £20m Series B round to accelerate their work tackling the NHS staffing crisis. The round was led by Perwyn and backed by Praetura Ventures and KHP Ventures. Well done to all involved!

You may have spotted another of our clients, Golf Guru, in the news lately. Their app, focussed on the mental aspects of golf coaching, was featured in Forbes. Check out the article for a great write-up.

Refer a friend...

Save up to 20% off your next invoice with our Refer a Friend scheme! If you make a successful referral, you and your friend can both save up to 20% discount on your next invoice with us, up to the value of £500!

Click the Refer a Friend button below for more information and to make a referral.

Follow us on social media

On our social media channels, we regularly post news and updates about legal issues relevant to start-ups and entrepreneurs. Find us on LinkedIn, Facebook and Twitter. Come say hello – we would love to connect!

Get the latest legal insights for your business

Don’t forget to keep an eye on the Seven Legal blog.

We post regularly on the legal issues you need to know about as a business owner in a bite-size format.

If you still have questions after reading one of our blog posts or want to chat through issues you’re facing, you can get in touch with us any time – just give us a call.