ABSTRACT
Investors who provide equity financing to high-risk ventures need to know how and when they are likely to realize a return on their investments before they commit any funds. In essence, having a harvest goal and a strategy to achieve it is indeed what separates successful entrepreneurs from the rest of the pack. The chapter presents applicable definitions of exits and harvesting. Business owners considering selling their business should consider ways of making their businesses "marketable." But beware: an initial public offering (IPO) is a not a sprint; it is a marathon that will consume a huge proportion of upper management's time and energy. There are a number of practical considerations people should evaluate when contemplating an IPO, including restrictions on publicity before and during the offering; selection of underwriters; disclosure of related party transactions; disclosure of executive compensation. Venture capital or private equity funds have multiple factors to consider when analyzing an exit strategy.
