exit strategy

Meaning

An exit strategy is a planned means of limiting financial loss or capitalizing on a business venture or investment once certain criteria are met. It can refer to an entrepreneur's plan to sell their company, or a general plan to wind down involvement in a project. It is used in venture capital, entrepreneurship, and strategic planning.

Examples

• Before investing any capital, the board wanted to see a clear exit strategy.

  Before investing any capital, the board wanted to see a clear exit strategy.

• Selling the company to a larger competitor was always our primary exit strategy.

  Selling the company to a larger competitor was always our primary exit strategy.

• We need to define an exit strategy in case this joint venture doesn't perform as expected.

  We need to define an exit strategy in case this joint venture doesn't perform as expected.

• Many startup founders design an exit strategy that involves going public within five years.

  Many startup founders design an exit strategy that involves going public within five years.

• Without a viable exit strategy, we run the risk of getting stuck in an unprofitable market.

  Without a viable exit strategy, we run the risk of getting stuck in an unprofitable market.

Common Mistakes

• ✗ He decided to make an exit strategy from his current job.

  ✓ He decided to plan his departure from his current job.

  Exit strategy is a business term typically used for investments, business ventures, or major projects, not for simply resigning from a regular job.

• ✗ Our exit strategy is to close the office at 5 PM.

  ✓ Our plan is to close the office at 5 PM.

  An exit strategy refers to a strategic business divestment or recovery plan, not a daily routine or physical exit.

Related Expressions

Practice

• Angel investors always look for a solid ___ before they commit any funds.

  💡 A plan for how investors will get their money back

  Show answer

  exit strategy

• If the new product line fails, our ___ is to sell off the remaining inventory and cut our losses.

  💡 A planned way to transition out of a business situation

  Show answer

  exit strategy