HARVESTING VALUE FROM ENTREPRENEURIAL SUCCESS
This article discusses ways for entrepreneurs to gain liquidity from their businesses, either with or without a sale of the business. In today's financial arena there is a wide variety of methods and financing vehicles that can enable private companies to harvest liquidity to meet their own needs for growth, the consumption requirements of their founders, or the challenges of tax and estate planning. For companies with limited growth opportunities but fairly stable cash flows, the alternatives range from orderly liquidation to highly leveraged transfers of ownership such as those accomplished by leveraged buyouts, ESOPs, and mezzanine finance. For companies with abundant growth opportunities, value is typically maximized through sale to a strategic buyer or an initial public offering of equity (although a new hybrid called the "private IPO" has recently emerged that looks more like an LBO than an IPO). 2000 Morgan Stanley.
Year of publication: |
2000
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Authors: | Kensinger, John W. ; Martin, John D. ; Petty, J. William |
Published in: |
Journal of Applied Corporate Finance. - Morgan Stanley, ISSN 1078-1196. - Vol. 12.2000, 4, p. 81-93
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Publisher: |
Morgan Stanley |
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