Exit Strategy – What is an exit strategy?

what is an exit strategy I got a great

what is an exit strategy I got a great question from one of my newsletter

question from one of my newsletter

question from one of my newsletter readers Marquez who wrote in to say he’s

readers Marquez who wrote in to say he’s

readers Marquez who wrote in to say he’s starting a car rental business and he

starting a car rental business and he

starting a car rental business and he wants to take on investors and wants to

wants to take on investors and wants to

wants to take on investors and wants to figure out what the exit strategy is

figure out what the exit strategy is

figure out what the exit strategy is gonna be in four to five years so

gonna be in four to five years so

gonna be in four to five years so Marquez there are three ways to exit a

Marquez there are three ways to exit a

Marquez there are three ways to exit a business and it’s a great way to think

business and it’s a great way to think

business and it’s a great way to think about what the exits gonna be before you

about what the exits gonna be before you

about what the exits gonna be before you bring on investors so you can set up

bring on investors so you can set up

bring on investors so you can set up expectations it may not work out exactly

expectations it may not work out exactly

expectations it may not work out exactly that way but if people come in with

that way but if people come in with

that way but if people come in with different expectations then you’re not

different expectations then you’re not

different expectations then you’re not setting yourself up for success and

setting yourself up for success and

setting yourself up for success and bringing on a partner really is like

bringing on a partner really is like

bringing on a partner really is like getting married you have to make sure

getting married you have to make sure

getting married you have to make sure you both in it for the right reasons

you both in it for the right reasons

you both in it for the right reasons that you love each other because if

that you love each other because if

that you love each other because if you’re in it for different reasons if

you’re in it for different reasons if

you’re in it for different reasons if you’re not super clear and communicating

you’re not super clear and communicating

you’re not super clear and communicating properly it’s not gonna work out and you

properly it’s not gonna work out and you

properly it’s not gonna work out and you do not want an investor in your business

do not want an investor in your business

do not want an investor in your business who’s not fully on board with the

who’s not fully on board with the

who’s not fully on board with the company it’s only gonna cause problems

company it’s only gonna cause problems

company it’s only gonna cause problems for you and may sink your company

for you and may sink your company

for you and may sink your company because you’re stuck with them forever

because you’re stuck with them forever

because you’re stuck with them forever some terms of an exit how do we get out

some terms of an exit how do we get out

some terms of an exit how do we get out of this how do we sell our business or

of this how do we sell our business or

of this how do we sell our business or how do we get rid of shareholders three

how do we get rid of shareholders three

how do we get rid of shareholders three main ways to do it okay the first is

main ways to do it okay the first is

main ways to do it okay the first is managing bio so management bio is where

managing bio so management bio is where

managing bio so management bio is where you buy back the shares from the

you buy back the shares from the

you buy back the shares from the investor so this could be something that

investor so this could be something that

investor so this could be something that you prearranged

you prearranged

you prearranged in advance you know in three years I’m

in advance you know in three years I’m

in advance you know in three years I’m gonna buy back my shares at this amount

gonna buy back my shares at this amount

gonna buy back my shares at this amount or five years or whatever it is so your

or five years or whatever it is so your

or five years or whatever it is so your your the company is buying out the

your the company is buying out the

your the company is buying out the investor at a profitable return for them

investor at a profitable return for them

investor at a profitable return for them the second one is acquisition so you are

the second one is acquisition so you are

the second one is acquisition so you are acquired by a bigger business who pays

acquired by a bigger business who pays

acquired by a bigger business who pays you money and buys out everybody and the

you money and buys out everybody and the

you money and buys out everybody and the third way to exit is by going public

third way to exit is by going public

third way to exit is by going public this is the least common way to exit a

this is the least common way to exit a

this is the least common way to exit a business is you go public so you have a

business is you go public so you have a

business is you go public so you have a stock on the public market and investors

stock on the public market and investors

stock on the public market and investors buy some of your shares and you’re able

buy some of your shares and you’re able

buy some of your shares and you’re able to cash out so those are the three main

to cash out so those are the three main

to cash out so those are the three main ways I would again strongly urge you to

ways I would again strongly urge you to

ways I would again strongly urge you to think about who you bring on board and

think about who you bring on board and

think about who you bring on board and if they’re bringing more to the table

if they’re bringing more to the table

if they’re bringing more to the table than just money

than just money

than just money I remember with my first business the

I remember with my first business the

I remember with my first business the software company and and we got it to a

software company and and we got it to a

software company and and we got it to a point we’re having some success and felt

point we’re having some success and felt

point we’re having some success and felt like we needed either an investor

like we needed either an investor

like we needed either an investor or some guidance to help us get it to

or some guidance to help us get it to

or some guidance to help us get it to the next step and we had a guy who

the next step and we had a guy who

the next step and we had a guy who helped us we met with who talked the

helped us we met with who talked the

helped us we met with who talked the talk talked a big talk at a great

talk talked a big talk at a great

talk talked a big talk at a great downtown office and wanted to be a

downtown office and wanted to be a

downtown office and wanted to be a partner in the business and something

partner in the business and something

partner in the business and something just felt wrong with it and ended up not

just felt wrong with it and ended up not

just felt wrong with it and ended up not working out with him and we felt regret

working out with him and we felt regret

working out with him and we felt regret you know we felt this might have been

you know we felt this might have been

you know we felt this might have been our shot but it just didn’t feel right

our shot but it just didn’t feel right

our shot but it just didn’t feel right he just didn’t fit the culture of the

he just didn’t fit the culture of the

he just didn’t fit the culture of the business and again if you get stuck with

business and again if you get stuck with

business and again if you get stuck with the wrong partner wrong investor it will

the wrong partner wrong investor it will

the wrong partner wrong investor it will sink your company because they’re

sink your company because they’re

sink your company because they’re they’re super hard to get rid of new

they’re super hard to get rid of new

they’re super hard to get rid of new investors don’t want to come in to buy

investors don’t want to come in to buy

investors don’t want to come in to buy out existing investors when I was in the

out existing investors when I was in the

out existing investors when I was in the VC business and we got pitched plans and

VC business and we got pitched plans and

VC business and we got pitched plans and people wanted to raise dollars to buy

people wanted to raise dollars to buy

people wanted to raise dollars to buy out their angel investors nobody wants

out their angel investors nobody wants

out their angel investors nobody wants to do that so you’re stuck with this

to do that so you’re stuck with this

to do that so you’re stuck with this person and so I remember it was such a

person and so I remember it was such a

person and so I remember it was such a hard decision to say no to this person

hard decision to say no to this person

hard decision to say no to this person to end that relationship because we saw

to end that relationship because we saw

to end that relationship because we saw a potential with them but we didn’t want

a potential with them but we didn’t want

a potential with them but we didn’t want to give up equity it wasn’t us being

to give up equity it wasn’t us being

to give up equity it wasn’t us being greedy it just wasn’t the right fit for

greedy it just wasn’t the right fit for

greedy it just wasn’t the right fit for our business so trying to get caught up

our business so trying to get caught up

our business so trying to get caught up in the excitement I know you need money

in the excitement I know you need money

in the excitement I know you need money and it was hard for us hey I’m making

and it was hard for us hey I’m making

and it was hard for us hey I’m making 300 bucks a month it’s hard to say no

300 bucks a month it’s hard to say no

300 bucks a month it’s hard to say no but it’s got to feel right because this

but it’s got to feel right because this

but it’s got to feel right because this is an important decision it’s too

is an important decision it’s too

is an important decision it’s too important to bring on the wrong person

important to bring on the wrong person

important to bring on the wrong person so hopefully that helps believe for

so hopefully that helps believe for

so hopefully that helps believe for those of you watching you liked the

those of you watching you liked the

those of you watching you liked the video please give it a thumbs up and I

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want to hear from you do you have

want to hear from you do you have questions about raising capital about

questions about raising capital about

questions about raising capital about how to exit your business leave it below

how to exit your business leave it below

how to exit your business leave it below and I will do a video response thank you

and I will do a video response thank you

and I will do a video response thank you so much and I’ll see you soon