A pre-exit involves selling your company in phases. You initially sell part of your company but keep a minority or majority stake in your company. You agree on a period of around 4 to 8 years usually, during which time you stay with the company before it is fully transferred to the new owner or new buyer. A pre-exit enables you to secure part of your assets, yet still, be involved in the development and growth of your company. Moreover, it means you can make the acquisition gradual and structured, and reduce the impact an acquisition has on – for example – your staff and customers
In a pre-exit, you and the buyer set up a new company that takes over all the shares in your company. In most cases, the buyer takes a majority stake in the company at that point. For example, they may pay for 70% of the shares, which then goes to you as capital. Offsetting this with your own deposit means that you immediately secure additional capital for the future.