Note on Pe Exits

In: Business and Management

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Case # 5-0022

Updated December 15, 2004

Note on Exits



The number and dollar value of exits declined significantly during the economic downturn of 2000. In 1999, equity underwritings in the technology, health care, and consumer segments totaled 665 but by 2002, the total was just 151 transactions. Mergers and acquisitions for the same sectors totaled 988 in 1999 and just 388 in

This document was written by Adjunct Assistant Professor Fred Wainwright and Research Assistant Angela Groeninger, under the supervision of Professor Colin Blaydon as a basis for class discussion rather than to illustrate either effective or ineffective management. Copyright © 2003 Trustees of Dartmouth College. All rights reserved. To order additional copies, please call (603) 646-0522. No part of this document may be reproduced, stored in any retrieval system, or transmitted in any form or by any means without the express written consent of the Tuck School of Business at Dartmouth College.


As shown in Exhibits 1 and 2, mergers and acquisitions are much more common in recent years than IPOs. Entrepreneurs that dream of an IPO and insist upon it when seeking an exit are vastly reducing their opportunities for successfully monetizing their shares.


The most popular exit strategies are: • A merger with another company, either public or private • An acquisition by another company, either public or private • An Initial Public Offering (“IPO”) whereby a private company offers its shares to the general public through a registration process with the Securities and Exchange Commission (“SEC”) • A private placement, whereby the company sells its securities to accredited or institutional investors.




In the investment world, an “exit” is the process by which founders, management and investors in a startup or growth company successfully find public or corporate buyers for some or…...

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