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    Chapter 5 - Venture Capital

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    Ma. Krizzel De Roma
    This document discusses different exit strategies that venture capitalists can use to realize returns on their investments in startups. It describes the main exit strategies as initial public offerings (IPOs), mergers and acquisitions, special purpose acquisition companies (SPACs), and liquidation. An IPO involves selling ownership of the company through publicly traded shares. Mergers and acquisitions involve one company purchasing another. SPACs allow private companies to go public by merging with a company that raised funds through an IPO. Liquidation occurs when a startup is unable to pay obligations and ends operations by selling remaining assets.

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    Chapter 5 - Venture Capital

    Uploaded by

    Ma. Krizzel De Roma
    23 views11 pages
    This document discusses different exit strategies that venture capitalists can use to realize returns on their investments in startups. It describes the main exit strategies as initial public offerings (IPOs), mergers and acquisitions, special purpose acquisition companies (SPACs), and liquidation. An IPO involves selling ownership of the company through publicly traded shares. Mergers and acquisitions involve one company purchasing another. SPACs allow private companies to go public by merging with a company that raised funds through an IPO. Liquidation occurs when a startup is unable to pay obligations and ends operations by selling remaining assets.

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    CHAPTER 5- VENTURE CAPITAL

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    This document discusses different exit strategies that venture capitalists can use to realize returns on their investments in startups. It describes the main exit strategies as initial public offerings (IPOs), mergers and acquisitions, special purpose acquisition companies (SPACs), and liquidation. An IPO involves selling ownership of the company through publicly traded shares. Mergers and acquisitions involve one company purchasing another. SPACs allow private companies to go public by merging with a company that raised funds through an IPO. Liquidation occurs when a startup is unable to pay obligations and ends operations by selling remaining assets.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    23 views11 pages

    Chapter 5 - Venture Capital

    Uploaded by

    Ma. Krizzel De Roma
    This document discusses different exit strategies that venture capitalists can use to realize returns on their investments in startups. It describes the main exit strategies as initial public offerings (IPOs), mergers and acquisitions, special purpose acquisition companies (SPACs), and liquidation. An IPO involves selling ownership of the company through publicly traded shares. Mergers and acquisitions involve one company purchasing another. SPACs allow private companies to go public by merging with a company that raised funds through an IPO. Liquidation occurs when a startup is unable to pay obligations and ends operations by selling remaining assets.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    Venture

    Capital:
    Exit
    Strategies
    ANNEDREI MAURIZZE BARCARSE, MBA
    Why do
    businesses
    exit the
    market?
    Exit The process that allows
    venture capitalists to
    realize their returns is
    called an “exit.”
    Also called “liquidity
    event”
    Venture capitalists can exit
    at different stages and with
    different exit strategies.
    IS IT TRUE?
    Exit
    Strategies
    • IPO

    • Mergers & Acquisition

    • Special Purpose Acquisition Companies


    & Liquidation
    When & How can you tell that a
    company is ready to sell its shares?
    One of the most This exit sells
    common exit ownership of the
    strategies is the Initial company through
    Public Offering or publicly-traded
    IPO. shares.

    A pre-IPO company
    is considered private
    However, after an
    IPO, a company can
    IPO
    and only raises
    gain access to more
    capital from a limited
    capital and better
    number of
    publicity by listing its
    shareholders,
    shares publicly on a
    including venture
    stock exchange.
    capitalists.
    Mergers & Acquisition

    • Mergers involve combining two companies to form


    An acquisition is when one company purchases one.
    another company, ultimately granting the acquirer a • There are two different financing methods for
    majority stake in the business.
    mergers: purchase and consolidation.

    Acquisitions typically occur through a mutual • A purchase merger is similar to an acquisition, in that
    agreement between two firms. one company purchases another outright and merges
    the acquired company’s assets into its business.
    However, there are circumstances where a company • A consolidation merger occurs when firms of the
    will forcefully take over another by buying more same size decide to join together as one entity through
    than 50% of its shares.
    mutual agreement.
    Special Purpose Acquisition

    Unlike traditional methods where


    investors deploy capital in an established
    business, a SPAC first raises cash through
    Special-Purpose Acquisition Companies,
    an IPO (which is held in a trust) and then
    or SPACs, are one of the most unique
    looks for a private company to merge with
    strategies to take a startup public.
    or acquire with that cash, thereby turning
    the private company into one whose
    shares are publicly traded.
    Liquidation

    When a company liquidates, any


    Not all exits are positive or within the remaining assets are typically sold —
    entrepreneur’s plans. As noted in the often at a discount — to help pay off
    beginning, only a small percentage of outstanding debts; the residual value, if
    startups survive. The remaining ones often any, after all, debts are paid is typically
    liquidate (ending company operations) divided among shareholders, according to
    due to the inability to pay obligations. a predetermined “waterfall,” or hierarchy
    of payments
    Joshua 1:9

    Thank you! "Have I not commanded you? Be strong and


    courageous. Do not be afraid; do not be
    discouraged, for the LORD your God will
    be with you wherever you go."

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