In most of the cases, these kinds of investors would look for an investment opportunity for shorter terms like 3-7 years. The Angel investors are also another category who would want a high return from their investments but they might stick to their investments for longer periods of time. However, both of these categories would look for exit strategies that they may have in front of them. Initial Public Offering A company can go to the public to raise funds when it is big enough to guarantee its credibility and the people would be interested to buy the shares of the company through registered stock exchanges. This would enable the investors get their money back almost instantaneously as soon as the company collects the money. Most of the investors believe that the startups where they are investing in would have the capacity to go to public within 5 years of their inception. But this may not always be feasible because a company needs time to grow and sustain. Thus the venture capitalists have to look for more practicable strategies. Acquisition The company can sell itself outright to a bigger company or individual who would have complete ownership and hence the venture capitalist would be able to get their investment back. The investor would also be able to negotiate the management contract in that case. However there is a possibility that the investor would lose his identity in the company. Management Buy Out In case of a buy out any one or two persons of the management may buy out the stakes of the company completely. In this case the persons who want to sell out the shares of the company would get his investment and return back and the other members would retain the shares of the company (Roberts, 39). The company has an advantage in a way that it can retain a part of the present set of management. Mergers The start-up can join hands with an existing company and can operate under a single name. In such a situation the investor would get some amount of cash and also little amount of stake in the new company. However, the company would no longer be within the control as before. Sale of the Company In case the company is sold to some other entity completely the entire management will change but the investor would get full refund of his money and return at the moment of the purchase. Above mentioned ways are some of the options opened for an investor to exit after few years of initial investment in a company, though the final motives of the investor will drive him to the way that would be most appropriate for him. Implications for Commercialization The commercialization of a new product or idea needs the support of the investors both financially as well as in terms of managerial support. Venture capitalists have an active role in this regard. The commercialization requires a lot of investment in resources, marketing the initial launch, advertisement and the brand building. It exerts a greater amount of pressure on the investors as they would have to spend a lot on an investment that may not guarantee them sufficient return (Sahlman, 496). Thus it is important for the venture capitalists to weigh the alternatives and should look for ample scope for exit strategies that would allow them with the flexibility to move out of their
Identify and discuss the various exit strategies that investors may use and the implications for commercialization Introduction A venture capitalist is an institution that would come forward to invest in companies or projects that have just started and need a seed capital as it cannot go to the public for collection of funds because the scale of operation is not so big…
rious businesses in the present technology driven world. With the wide advent of internet, its impact upon the daily life of the people has undergone radical changes over the past few years (Atrens, 2001). As a consequence to the comprehensive transformation of traditional modes into the modern technological environment, the interactive media and the social networking sites have become an essential part of the general people’s lives (Nixon, 1997).
Therefore, as manager in a private hospital responsible for managing 15 bedded ward and 18 staff members, it is vital to take into consideration for both internal and external factors that may have a significant impact on organization performance (Muller, Bezuidenhout and Jooste, 2006).
A Product is defined as a tangible commodity and intangible service which helps the company to deliver superior performance. (1) Implications of Launching a Product into the Market in terms of Commercialization The key elements in the development and commercialization of the new product would include market development and penetration agility, markets share momentum with a suitable competitive advantage and profitability, which measures the rate of return concept as well as the shareholder’s growth (Ardalan, 2009).
Although such a model is effective in generating a new level of clientele and integrating services and/or products with a new environment, it is oftentimes the case that a given company/organization or business entity has grown to such an extent that it is necessary to expand internationally.
The exit strategy of the investors depends on the performance of the organization in which the shares are held and also taking the future prospects of stock performance into consideration. The natural preference of the investors to exit their position of investment depends on the relatively higher value of market price over the intrinsic value.
Horlick-Jones, J. Sime, N. Pidgeon, 2003, pp. 262-285).
During the late 1980s and into the 1990s risk management activity has been growing explosively, both in terms of market trading and in terms of intermediated deals. In some cases, the risks of the newly
The answer is to build momentum for sales that will enable the company to achieve growth or prosper thus adding more customers to its role, expanding the influence of your business (Zoltners, Sinha and Zoltners,
of children, which occurs in a majority of cases encompasses delay in providing healthcare, not attending to the daily nutritional and other needs of the child, abandoning children, inadequate supervision and failure to provide a secure atmosphere for the child. Physical
To develop effective marketing strategies, organizations need to study consumer behaviour. The study allows marketers to understand the psychology of consumers’ reasoning and the factors that influence their preference between
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