The last fundamental we will broach on through our journey reading Winning Angels: The 7 Fundamentals of Early Stage Investing will be harvesting.
- Walking Harvest – the owner takes the cash out as it is earned
- Partial Sale – this happens when the company is doing moderately well, but does not have good exit prospects
- Initial Public Offering (IPO) – this is when the business becomes public and usually the public price is often better than the paid-in price
- Financial Sale – this is when the buyers are typically purchasing the company based on its current and expected cash flows
- Strategic Sale – buyer will pay the value beyond what the cash flow might suggest.
NEGATIVE OUTCOMES
- Chapter 11 – this bankruptcy generally means all equity holders are washed out significantly or reduced in their ownership share.
- Chapter 7 – one judge makes the final determination on outstanding liabilities.
Amis, D., & Stevenson, H. (2001). Winning Angels: The 7 Fundamentals of Early Stage Investing. London: FT Press
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