Aldrich Law Firm, Ltd.
Aldrich Law Firm, Ltd.

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877-508-0433Good People Deserve Good Lawyers. ®

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A business plan can include an exit strategy

Entrepreneurs in Las Vegas starting a new small business may be concerned about how to form the business in order to be appealing to investors. Investors who want to achieve a significant benefit from a new business may be looking toward the exit strategy in order to determine whether an investment is a good fit. For many small business founders, the most common thoughts about an exit strategy can be particularly dramatic: for example, a lucrative buyout from a major tech company or going public on the stock market with an initial public offering (IPO).

However, many companies never reach that stage at all; for tech start-ups, in particular, businesses that form with the best of intentions may gradually dwindle away, bleeding cash as they go. Others may work to develop steady profitability, but this outcome could be less appealing to investors looking for significant returns. While acquisition can be a major way for businesses to achieve large returns, making certain decisions during the business formation and planning process can help small companies to improve their chance for a sale.

While some companies may be interested in some of the technologies produced by a business, they may be less interested in acquiring the whole business. However, by developing distinct business lines and sectors, it can be possible to achieve major returns for investors by selling off a specific segment while continuing the business’ operations in other spheres of activity.

When founders are considering forming a business, the exit strategy can be an important part of business formation and planning. A business and commercial lawyer might help entrepreneurs to choose the right type of business entity and structure to meet their needs and achieve their goals. In addition, an attorney may be able to help business founders to develop contracts and handle transactions in a way that helps them achieve maximum benefit while protecting their rights.

John P. Aldrich
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