Key Exit Strategies: An Investors' Perspective

It is important for any investor to divest its holdings and exit in the most profitable manner. As such, exit strategies are a very critical part of undertaking investments, for both private equity players and strategic business investors. The investment horizon is typically pegged to 5-7 years. That said, exit mechanisms are not always time bound and are often articulated as remedies available to the investor, owing to default / breach by the investee company or key promoters, thus triggering a possibility of an early exit. It is therefore important to efficiently understand and negotiate the exit rights of an investor (preferably, at the term sheet stage), to ensure maximum returns.