Business Exit Strategies
There are a number of business exit strategies, and some of them involve investors investing their money. There are other exit strategies that involve a combination of the two.
The most popular exit strategy for a start-up company is to sell the company to an investor. This is what many investors do first. When they make an investment, they pay you a percentage of the profits of the company, after which you will be paid a lump sum.
Although you might have to put in extra time and money in order to find a good investor, it is a much less expensive option than having to pay off the debts of the company, or selling the company to a corporation. If the investor goes out of business the debts you owe on the company, do not go with them, leaving you with nothing but a worthless piece of paper.
However, investors who invest in companies that have failed do not necessarily offer the best business exit strategies. Rather, they offer them because they receive more return on their investment. Therefore, they are willing to take a risk, and they want to make sure the business can perform well.
If you are thinking about selling the company to a corporation, it is a good idea to consider working with them to restructure your debt. Many of the creditors who are a part of your case may be willing to renegotiate the terms of your debts.
In this case, the corporation would use the money from your settlement to pay off the debt, so that you would not have to pay the full amount to the creditor. Your creditors would also be protected from losing a large amount of money in the restructuring.
Of course, if you are going to sell the business you should consider a partnership instead. Here are some basic tips for doing this.
Consider your business plans. Be sure to examine all of your business plans and see how many people you could hire, what assets you could sell, and what you would do with the business. Take a look at all of your options before you finalize a sale.
Consider your competitor's plans. Businessmen have more equity than you do, and that makes it easier for them to come to an agreement with your creditors. They will offer to pay off your debts, and they will be able to afford the guarantees they need.
Consider any options your creditor might offer. Sometimes your creditor may offer to waive your debt completely. These are attractive alternatives, but they may not be available to everyone.
You may have to come up with money to start over, and in order to do this you may have to sell the business for less than you owe on it. It is worth considering all of your options before you make a decision to sell the business. After all, you will end up paying less in total if you do this.
Whatever business exit strategies you choose, you should make sure that you fully understand each one and the consequences. Otherwise, you could end up ending up owing more money.