Trade sale - Acquisition
Sometimes a VC will exit when a third party purchases the entire firm.
One way in which this is accomplished is to structure the transactions as a sale of all the shares of the company, in return for cash, shares of buyer, or other assets.
The buyer will often be a larger, established company (industrial buyer) that are seeking a foothold on the technology possessed by the selling firm.
In some instances, the buyer can be another VC
Secondary Sale
The VC may also exit by means of a sale of its shares to a third party.
This type of exit differs from an acquisition, reason being only shares of the VC are sold to the third party.
Buyback / MBO
In a buyback, the entrepreneur repurchases the shares held by the VC. Management Buyout is a variant of a buy back.
The difference is that instead of the majority owner (the entrepreneur) the management buys the company.
Sometimes a VC will exit when a third party purchases the entire firm.
One way in which this is accomplished is to structure the transactions as a sale of all the shares of the company, in return for cash, shares of buyer, or other assets.
The buyer will often be a larger, established company (industrial buyer) that are seeking a foothold on the technology possessed by the selling firm.
In some instances, the buyer can be another VC
Secondary Sale
The VC may also exit by means of a sale of its shares to a third party.
This type of exit differs from an acquisition, reason being only shares of the VC are sold to the third party.
Buyback / MBO
In a buyback, the entrepreneur repurchases the shares held by the VC. Management Buyout is a variant of a buy back.
The difference is that instead of the majority owner (the entrepreneur) the management buys the company.