Exit Strategies
The process by which the holder of a security in a private company achieves liquidity. Unlike public companies, private companies have no trading market for the resale of securities. The normal exit strategies for an investor in a private company are a sale, IPO, redemption, or sale of the individual security to another stockholder. Registration rights are designed to help investors achieve liquidity by facilitating the sale of restricted securities after a private company goes public. Put rights are designed to permit investors to cause an issuer to effect a redemption of the investor's securities while the company is still private.
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