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Steelpenny

02/13/21 8:23 AM

#15384 RE: 66 #15382

I like to call them murders and executions a line from the movie American psycho

Mergers and Acquisitions vs. Initial Public Offering
While both strategies are very feasible for larger companies, usually an M&A exit is much more feasible to a smaller company. In fact, if your company is to small then the guys on Wall Street won’t even give you the time of day and as we all know, they are the ones would lead you through that process. An M&A is also one strategy that could be completed at nearly any time, while the IPO may a few years to go through all of the legal issues dealing with the SEC and Wall Street in general.

M&A

One of the best things about an M&A exit strategy is that it may come out of relationships that present an opportunity. This means that a business does not even have to take the time and money to present itself to a number of different buyers and convince them that it would be a good acquisition; the company comes to them and says, “you would be a good acquisition for us,” and the deal begins.

Another M&A exit strategy is to find M&A advisors and investment bankers to take you through the M&A process and identify a number of different buyers who may or may not be ready and willing to make the acquisition.

IPO

In order to go through the IPO process your business needs to be of a large enough size that it can get the attention of the bankers on Wall Street. Although we may not have seen this in the most recent years due to the 2008 market crash, in a typical environment the bankers are usually selective in the companies they represent and lead through an IPO. Typically these companies will have a few quarters of growth along with pretty high growth rates. Again, this process also takes a fairly long time from beginning to end.