Why a smart exit could also be interesting for you

Not every entrepreneur with plans to sell wants to immediately sell the entire business, explains acquisition specialist and partner Wilbert van Gerwen. "That’s why Rembrandt M&A developed the Smart Exit."

“Sometimes, as an entrepreneur, you want to secure part of your company’s value upfront while still remaining involved for a while. In a pre-exit, you sell a part of your business to an investor, who then actively participates in decision-making. They often gain significant influence, which not every entrepreneur welcomes.”

Full control

The Smart Exit is a new exit strategy for entrepreneurs who want to secure part of their company’s value upfront. In a Smart Exit, a group of usually between ten and twenty investors acquire a portion of the shares—without gaining control. So, you sell part of your business but retain full control.

Blind trust

These investors come from Rembrandt’s network—such as long-term partners or former clients interested in new projects. They know Rembrandt applies a rigorous quality screening process. Some investors even commit blindly based on their trust in this screening.

Quick completion

Thanks to this prior screening, a Smart Exit can often be initiated quickly, Van Gerwen explains. “We can usually estimate early on whether enough investors are willing to take small stakes. Because the investors trust our judgment, a transaction can often be closed within three to four months.”

Agreements on exit

In a Smart Exit, the parties agree on a full future exit. The entrepreneur and investors typically agree on a timeframe of four to seven years. After this period, the entrepreneur can fully step down and sell their remaining shares. Investors can also cash out their stakes at that time.

Synergy

Shareholders do not have control over the company, which is a major advantage of the Smart Exit. In practice, however, investors often take on an advisory role. Many are former entrepreneurs who enjoy providing informal input—for example, collaborating on a promising e-commerce strategy. While collaboration is not obligatory, synergy and joint initiatives often emerge.

Considerations

There are also downsides to the Smart Exit. Be aware that the costs may exceed the benefits. Your company will undergo a thorough due diligence on behalf of the investors, which requires time and money. However, a positive outcome usually paves the way to a Smart Exit and is well worth the investment.

Periodic reporting

After a Smart Exit, you can’t simply withdraw money from your business. As an entrepreneur, you have an obligation to provide periodic reports to investors. There is also an annual shareholders’ meeting, but frequent contact is not mandatory.

Sale price

The sale price naturally plays a key role in both a pre-exit and a Smart Exit. Your company’s value can increase between the partial and full sale. If you remain a full shareholder for five years, the total proceeds may be higher than through a Smart Exit. On the other hand, a Smart Exit allows you to access part of the funds now, which you can invest for additional returns.

A lot of certainty

A Smart Exit offers certainty. Once the valuation is set, the sale price typically cannot decrease. The price is fixed, even if the company performs worse than expected after the Smart Exit.