Many who hold business or who hold crypto assets have this question in mind about how to make the exit strategy. It is not easy, and the exit strategy must only involve the set of people you trust.
Most of us choose the path that we see ahead, and we do not plan anything for our businesses and assets. But when it comes to crypto assets, we spend an unnaturally colossal amount. So it becomes our responsibility to balance and manage everything together.
When I visited the page of how-to-make-passive-income-in-2020 to plan my exit strategy, I came across some great ways to follow. Here I would explain to you in detail the cryptocurrency exit strategies that you might have for your crypto asset.
What is an Exit Strategy?
Whenever you are investing, it becomes your responsibility to look forward and think ahead. This automatically counts on to consider your exit strategy from your asset or your business. The term “exit strategy” in straightforward terms means that you leave the ownership of the asset that you have. But that could be in any manner, such as you could terminate the asset and pass on the authority to someone else. But this plan would be such that with this exit strategy, you would profit handsomely, which is why it is an exit strategy. You will have to assess what you have done with the asset and how much difference it shows now.
- Everyone has to exit, but a planned exit strategy is much better than an unplanned one.
- A wrong exit plan will affect your retirement plan majorly
- This will also help you concentrate on your health issues without bothering about your asset or your business
- Your interests and priority might change, but that will not affect your livelihood
- You can keep yourself ready for all unexpected arrivals
- If you are in a situation where you need much money, all of a sudden then your exit strategy will be helpful by all means
Types of Exit
There are two clear types of exit that we are well aware of: the internal exit strategy and the other is the external exit strategy
Internal exit strategy crucially involves partners, family, employees, and management. This is like the asset remains almost at home with closed ones.
External exit strategy involves any financial buyer, strategic, recapitalization, IPO, liquidation, from whom you may receive a quantity amount of money.
Here we would explain a few of them so that it becomes a little easy for your understanding, and you can read it whole.
The Lifestyle company exit is that kind of a door that prioritizes the owner’s profit amount without really thinking of any expansion in the future. You can keep the business expenditure least and pocket the majority of the profit. You need not have to think about the growth of the business in the future, and you can take out the maximum possible from this exit.
This is the best system for small businesses that you can terminate when you think that the company is not churning any more profits to you. But you need to keep one thing in mind that you must have partners who would agree to do the same as what you do.
The legacy exit is another new exit, which allows the asset or the business to remain in the family. But there are certain drawbacks to such a kind of departure as you may know. This kind of exit is recommended to the owners who want to transfer their assets to their children. You can keep training your successor before you take the exit so that by the time you take the doorway, he/she is well equipped to sit on the business.
You can also sell your stakes to your partners and get some money for yourself. If you sell your stake, then the business keeps running as it was with your partners. This is another healthy way of exit. If you sell your stakes, those will be bought by either any of the existing partners, or any new partner can join, and this will be profitable for you.