Making an Exit

Abstract

Private equity investment is an alternative funding source for high growth potential small businesses. These investors supply capital necessary to support the business in exchange for an equity share of the organization. In addition to supplying the necessary capital, these investors also provide management and mentorship to the companies with the goal of increasing profitability and reaching an exit. Two main exit strategies are an initial public offering or being acquired by another firm. The exit strategy is an important consideration for investors as this is how they are able to see a return on the investment. As such, understanding what factors contribute to a successful exit can help investors and founders make more informed decisions. This study examined 12,454 global and 5,290 U.S. companies using Crunchbase to evaluate successful exits for sport-related enterprises. Data were analyzed using logistic regression and survival analysis, and results demonstrate the importance of attracting investors and in focusing on substantial revenue generation.