9 Business Exit Strategies for Startups and Mid-Sized Businesses

by / ⠀Entrepreneurship / September 29, 2025
exit strategies
Stepping away from a company you built takes planning, clarity, and a steady hand. Whether you’re retiring early or want to move on to pursue your passion, you need clear exit strategies to avoid rushed deals, pressured valuations, and seller’s remorse soon after closing. The good thing is that the right exit approach prevents these worst-case scenarios and turns a complex change into a smooth transfer of value and leadership. In this article, we’ll go over ten practical exit strategies you can match to real situations. Let’s begin!

Family succession

Ownership moves to prepared family members to protect the legacy and privacy. Keeping the business in the family can also strengthen multigenerational wealth, though immediate liquidity is limited and market pricing is not the focus. Family succession works when successors are capable, motivated, and supported by clear governance.

Partner buyout

In multi-owner companies, one partner exits by selling to the remaining owners under a buy-sell agreement. The process remains confidential and often proceeds faster than a broad market sale, although pricing may lag behind a competitive auction. Partner buyout works when relationships are strong and funding is available.

Management buyout

Your leadership team acquires the company. Continuity is the headline benefit of an MBO, since the buyers already run the operation. Valuation may be constrained by financing capacity, and seller financing can add credit risk. Select this option when a strong team is ready and you prioritize stability over maximizing every dollar.

Initial Public Offering

An IPO opens access to public capital and creates ongoing liquidity over time. It requires a meaningful scale, consistent growth, clean financials, and a team ready for the discipline of a public company. Founders rarely exit fully at the time of listing, so plan for continued leadership. Consider this for larger, fast-growing companies that can meet the expectations of investors and regulators.
See also  Confessions of a Former Self-Doubter

Employee stock ownership plan

An ESOP trust buys shares over time and allocates them to employees. Owners unlock liquidity with notable tax advantages while maintaining the company’s independence and autonomy. ESOPs require careful design, ongoing administration, and pricing at fair market value. They shine in stable, profitable firms with enough employees to support the structure. Suppose you are exploring an ESOP to exit your business. In that case, platforms like Teamshares and Common Trust can assist with the transition of ownership to employees through various structures, including employee ownership trusts. You might also seek help from full-service ESOP advisors and bankers. These firms conduct feasibility studies, design transactions, raise debt, and manage project closings. Good examples include CSG Partners, The Menke Group, Chartwell, and Prairie Capital Advisors.

Selling to a competitor

You sell to a rival company that sees clear synergy in your customers, tech, team, or footprint. Valuations can be strong because the buyer values both earnings and strategic fit. Expect immediate liquidity and a clean handoff, with possible earn-outs tied to post-close performance. Choose this option when maximizing value is more important than retaining control.

Strategic merger

Two companies combine as peers, and you receive equity in the new entity rather than full cash at close. A well-designed merger can broaden product offerings, increase reach, and scale, setting up long-term upside. Integration work is real, and immediate liquidity is limited. Use this when the combined platform is clearly stronger and you want to stay involved. Several types of online platforms assist with mergers, ranging from deal finding to diligence and closing. Axial focuses on North America and facilitates thousands of mergers and acquisitions (M&A) deals on its platform each year. Dealsuite plays a similar role in Europe, serving mid-market projects and facilitating algorithmic matching for thousands of M&A professionals. For diligence and M&A workflow, several services are available to keep the process secure and organized. Datasite and SS&C Intralinks offer VDRs and transaction management capabilities used across the deal lifecycle, while DealRoom focuses on buyer-led project management and post-merger integration workflows.
See also  3 Tips For Entrepreneurs To Balance Work and Life

Sale to a financial buyer or private equity

A financial buyer invests for return, not for synergy. Many structures allow you to take money off the table now and retain a minority stake for a second payout later. You gain capital, governance rigor, and operating support, but you share control and align to a defined exit window. Selling to private equity fits profitable businesses with obvious growth levers and owners willing to stay engaged. Several online platforms can put your business in front of private equity buyers or streamline a PE-style sale process. If you want to put your crypto business for sale, Acquire.Fi can match you with vetted investors looking to enter the Web3 industry.  For business owners in other industries, Empire Flippers can list your business for sale. They operate a vetted marketplace with more than $550 million in completed sales. Flippa, another PE-style platform, offers a broad marketplace along with optional diligence add-ons that can help align a listing with PE expectations.

Partial sale

You sell a portion of your equity to diversify wealth and bring in growth capital while keeping a meaningful stake. Governance becomes more complex, and you share control, while preserving upside as plans unfold. This suits owners who want liquidity now and believe the business can compound from here.

Early planning pays off

Ideal business exit strategies should align with personal objectives. Decide how much liquidity you want at close and how much ongoing involvement you can accept. Map your timeline to the structure, then align on control preferences, culture priorities, and employee outcomes. Layer in current market conditions, customer concentration, recurring revenue mix, legal considerations, and tax planning. Whatever exit path you choose, you must plan your exit strategy years to allow your business to grow, increase revenue, and strengthen your management bench. Additionally, the extra time will enable you to build a team that facilitates the transition and streamlines your financial processes. Photo by Richard Bell; Unsplash

You Might Also Like...

Certified Translations

Top Documents That Require Certified Translations in 2025

motivational speakers

How to Find and Choose the Perfect Motivational Speakers for Your Next Company Event

invoice generator

How an Invoice Generator Helps U.S. Businesses Save Money and Operate More Efficiently

About The Author

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders. MBA from Graduate School of Business. Former tech startup founder. Regular speaker at entrepreneurship conferences and events.

x

Get Funded Faster!

Proven Pitch Deck

Signup for our newsletter to get access to our proven pitch deck template.