M&A vs IPO: What will you go for?

Mergers, acquisitions and IPOs all change the ownership structure of your business, and all convey interesting benefits. To choose which option is most fitting for your situation, consider your goals and resources. Mergers are a good option for cash-poor businesses searching for a surge of growth, whereas acquisitions are more proper for business owners hoping to cash out.

M&A versus IPO

There's no better approach to get a huge capital injection than to take part in an initial public offering. IPOs offer businesses a level of capital they can't gain through private exchanges. IPOs additionally give more prominent flexibility to business owners to increase their stake in the business or leave when they're prepared, since the stock is easily traded. An effective, much publicized IPO can immediately grant a business positive national exposure.

One of the best things about a M&A exit strategy is that it might leave connections that present an opportunity. This implies a business does not need to take the time and money to present itself to different buyers and persuade them that it would be a good acquisition; the organization comes to them and says, "You would be a good acquisition for us," and the deal begins.

Another M&A exit strategy is to discover M&A advisors and investment bankers to take you through the M&A process and identify various different buyers who might possibly be prepared and willing to make the acquisition.

By and by, I think IPO-as-exit is significantly more compatible with "founder CEO" than M&A exit (unless amid the M&A exit, the founder plays an extremely key role in the combined entity), and in this manner is a better aspiration. An incredible M&A exit still beats a stick in the eye, obviously.