Exit Strategy

While determing exit alternatives, it is targeted that the exit will take place in 5 years after overseeing the sustainability and profitability of the investment.

Identified exit goals are listed below;

  • Initial Public Offering:
    An initial public offering is one of the most preferred exit strategies in venture capital investments. When the company reaches the desired magnitude, profitability and performance, an initial public offering might be a very suitable option. SMEs shares may be offered to the public in the Emerging Companies Market (ECM) operating under Borsa Istanbul (BIST).

  • Sales to Strategic Partner:
    This is the most common procedure followed by a public offering. An appropriate partner, after considering the synergy that it shall obtain, can purchase the company adding a premium to the value of the company. This operation establishes a 100% exit for the investors and is a much easier and cheaper exit strategy when compared to a public offering. However, finding the right partner is not always possible. Explaining a company to a strategic partner is usually easier than having to persuade the whole market about the figures of a company. Finding a buyer in some countries can be especially hard. Finally, some companies tend not to opt for this option as they have the fear of losing the majority control of their company.

  • Sales to Financial Partner (to another Venture Capital Fund):
    Venture Capital Funds (VCFs) might desire to sell the company to another VCF or a financial institution. This can be particularly preferred in an environment where initial public offering is unavailable and in the case where no strategic partner is able to be found. It is more likely that the entrepreneur shall remain in the company. Besides, a financial partner can manage the company better and prepare it for the initial public offering. However, in the case where the financial partner cannot achieve a synergy from the partnership they may desire to purchase the company with a lower price than the strategic partner. In addition, the financial partner's will to market/sell the company in the short term might not be found appropriate by the investors.

  • Resale to Company Partners :
    This exit strategy has priority for venture capital funds. Although this procedure is the lowest profitable one when compared to others, KOBI Venture Capital Investment Trust Incorporation, in line with its mission, aims to exit from the investment using this method. This is done at a point where it is believed that the project has reached a specific target. This exit procedure is named as the most difficult sales procedure in the sector. It is difficult because entrepreneurs find it hard to find the adequate financing necessary for the purchase while it is very troublesome to reach an agreement over the value of the company. In the sector, this exit procedure is considered as the sole option to take while exiting from a failed investment.