Topic 83
Exits under Duress: Have a Plan if the Deal Does Not Work
Deals often do not work, no matter how hard you try or how diligent you were. Before you close a deal, be sure to have at least considered what you might do if the deal you choose does not work.
HAVE AN EXIT PLAN
- Be sure there is a bolt-hole on every deal before you close it.
- A bolt-hole is a place through which one can exit on short notice to escape peril.
- Have a few practical bolt-hole options in mind regarding how a deal, once done, can be “undone” if it does not perform or fit, or needs to be liquidated in a way to mitigate the damage of a mistake:
- Sale to competitor
- Sale to customer
- Sale to investor group
- Sale to management
- Initial public offering
- Be sure you have some options.
