Companies in the venture ecosystem exit in three primary ways: conversion to common shares, VC involvement post-IPO, and merger or acquisition (M&A).
M&A is the most common exit route, involving initial contact, due diligence by potential acquirers, negotiation, and VC support throughout the process.
Bankruptcy and wind down are unfortunate outcomes for companies unable to achieve scale or secure further financing, with VCs playing a role in these difficult decisions.
Secondary sales of private company shares have emerged as an alternative liquidity avenue, with VCs' opinions influencing potential impact on stock prices and tax considerations.