VCs are instrumental in the growth of startups. As these businesses evolve, VCs often look for exit strategies to realize their investments.

Here’s a deep dive into some of the most common exit avenues:

Key VC Exit Strategies

  • Trade Sale: Selling the company to another business. E.g., Snapdeal’s sale of FreeCharge to Axis Bank.
  • Initial Public Offering (IPO): Taking the company public, E.g. PayTM and Zomato.
  • Secondary Sale: Selling shares to another investor. E.g., Early investors in Ola selling their stakes to SoftBank.
  • Buyback: Where the company repurchases the VC’s shares. E.g., Infosys’ share buyback in 2017.
  • Merger or Acquisition: Combining with another company, like Amazon’s acquisition of Perpule.
  • Stake Buyout by a Later Stage Fund: A later stage fund acquiring the VC’s stake. E.g., Sequoia Capital buying out stakes in Byju’s from earlier investors.
  • Write-off: Accepting a loss and moving forward. Some early investors in Housing(dot)com wrote off their investments after the company faced challenges.
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