The financial industry is constantly evolving and redesigning itself. The appearance of new technologies that became an essential part of this world only boosted these changes, and now there is no room for doubt: new updates will continue to appear day after day, solving decade-long inefficiencies and delivering a more effective financial industry. Despite these changes, there are still some key aspects of the financial industry that have remained unchanged, and will probably remain the same due to the comfortable and solid space they occupy in the industry. One clear example is exit strategies.
First and foremost, we should start by acknowledging the importance of paying special attention to the exit strategy that a company can offer. But why is it so important? An exit strategy is a plan that allows investors to liquidate their position in a financial asset. When it comes to investing in startups, an exit plan can determine whether you agree to infuse capital in a project, or not. If the business model integrates a smooth way of exiting that clears up future uncertainties and promises solid returns and potential dividends, then it is surely worthy of your attention. But keep in mind that not all the available options competing for your capital will offer you an exit. In fact, most of them won’t.
Furthermore, an exit strategy becomes even more important when considering investing in a private company. Investments on private equity might appear to be a little bit riskier, as their future plans are usually presented as much more ambiguous.
Here is where InvestHub comes in, bringing a solution for both private companies and investors. InvestHub offers a clear exit strategy that can be included within a company’s business plan. This provides investors with a clearer vision of the future of their investment, and provides ease by ensuring a way of getting the capital invested back. What is the exit strategy? The Capitalista secondary market. Through its connection with its sister company, InvestHub will feature the possibility of listing a company’s equity on a secondary market, where any asset will be easily traded, both private and public. Investors can rest assured knowing that the company they invested in can provide the returns they promised if they succeed to raise capital.
Investing can be a tricky business, especially if you are getting involved with companies through a private-equity platform, which further changes the rules of the game. Planning ahead and reviewing which alternatives will eventually bring capital returns is one of the most convenient steps you can take in advance. A company with a solid foundation, such as an exit strategy built within the business plan, offering a secondary market with its own index where their equity will be issued and traded, will, at the very least, provide you the clarity you need to fully commit to your final investment decision.