7. Exit mechanism
There are many kinds of investors' exit, such as IPO (first public listing), acquisition, company repurchase, secondary sale, liquidation, cancellation, etc. The earnings obtained in the form of IPO are higher than other exit paths. But in China, there is a strict provision for listed companies, and only those "leaders" in various industries are expected to be listed, so they enter the barrier. Moreover, the premise of IPO's success is a health-specific stock market, which is not only a significant significance for listed companies, but also has a key meaning of the long-term prosperity of venture capital industry. Although China's stock market has achieved weak effective, there is still a large number of irregular operations and many potential instability factors. Is China's IPO market capable of carrying venture capital supporting companies listed, whether they can give such high-tech and high-risk companies that are not known for the more accurate market assessment.
Acquisition is also a more common way to exit. Although from the overall level of history, the benefits produced by the acquisition are worse than the IPO, but it is more comparable to the two, it is not difficult to find that the acquisition has its superiority. First, the IPO market is high for listed companies. Usually only those risky capital support companies that are very successful, income or potential income can be listed. Unlike companies that are available for various operating conditions. Second, the IPO market is very unstable, and the stability of the acquisition is strong. Especially in the 1990s, large companies have a boom in the acquisition of venture capital support enterprises, and their acquisition provides a reliable exit path for venture capital investors. Third, the accounteded venture capital support companies can usually achieve a lot of technology, management and funding from the acquisition of enterprises.
In addition to the above, the sale is not a good exit method. Sold include three ways: Direct Sale, Employee Stock Selection Program (ESOP), managers bought (MBO). According to the actual situation of the company, the acquisition and MBO can be used as a preferred exit program.
