Selling a (part of your) business through a pre-exit

Cash out part of your business value in advance?

Not everyone wants to step back from the company shortly after the sale. This is where the pre-exit comes in: you transfer part of the shares in advance but remain involved for a number of years. This exit strategy is becoming increasingly popular and at Marktlink, we are happy to guide you through the process.

What is a pre-exit?

As the name suggests, with a pre-exit, you are preparing for a full sale. It allows you to cash out part of your business value in advance and definitively say goodbye to the company in a few years. You remain active, but sell a (significant) portion of your shares and gradually work towards a complete exit. As the selling party, you receive the purchase price that corresponds with the percentage of the shares you are selling at that time. This purchase price is offset against your own contribution, securing extra capital for the future right away. More and more entrepreneurs opt for such an exit plan.

When setting up a pre-exit structure, you sell all shares to a newly established investment holding. You then repurchase an agreed-upon majority or minority interest. In the years leading up to the exit horizon, you work with the newly recruited investor on the growth strategy to ultimately sell the company together at the actual exit. The applicable value of your shares at that moment is then cashed out.



“In order to keep your business alive, to be future-proof, it is necessary to take steps. Letting go to move forward, but not saying goodbye yet.”
- Jurrijn Laan, Creative Media Network

Advantages of a pre-exit

Do you want to re-invest your capital in the company or or gradually step back while your company continues to grow for a few more years? Then the pre-exit is an interesting sales strategy. This exit plan often involves a capital injection, which contributes to achieving the growth strategy. When an investor participates in the company, it brings with it knowledge and skills that positively influence the company's value. Moreover, with a pre-exit, you not only secure part of your own capital, but it also means that the company consolidates, which guarantees continuity for the future. Other advantages of the pre-exit, for both you and the buyer, are:

  • you create more time for yourself and the employees to get used to the idea that the company is being sold;
  • you have more control over your own tasks and can delegate some of the responsibilities to others;
  • customers, suppliers and other stakeholders are involved early in the acquisition process and you can handle their potential reactions yourself;
  • the secured capital and the freed-up time mean that you don't have to wait until after your retirement to fulfil other wishes and activities;
  • you often receive a higher amount at the actual exit because the company's value has increased due to the achieved growth steps.

A pre-exit with private equity

A pre-exit is often carried out with the help of financial participation firms, better known as 'private equity'. Private equity firms like to invest in healthy companies with realistic and strong growth potential. With a concrete growth plan and an attractive capital injection, the goal is to increase the company's value and sell the shares with the highest possible return within a predetermined period, typically 4 to 8 years. For you, this means that you benefit from this attractive financial two-step process twice.

Marktlink has a broad investment network throughout Europe. In our database, we have more than 200 investment companies with whom our advisors regularly have contact and most of whom we also know personally, because in more than half of our transactions, private equity parties are involved. We know the market like no other and select an average of 6 to 10 potential buyers for you to meet. This enables you to make an informed choice that suits you and the company, resulting in a significantly stronger negotiation position and ultimately the best deal of your life.

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Do you want to know more about pre-exit? Feel free to contact us and our experts are happy to help you.