Guidance

Track 3: Exit Options Comparison Matrix

Published 2 December 2025

FROM SERIES A TO SCALE 

EXIT OPTIONS COMPARISON MATRIX 

The following matrix provides an illustrative comparison of the key characteristics of three common exit routes for growth companies — Trade Sale, Private Equity (PE) Sale and Initial Public Offering (IPO). Each option differs in terms of timing, control, valuation and ongoing commitment. Understanding these distinctions helps founders plan an appropriate exit strategy aligned to their business maturity and shareholder objectives. 

Please note that these are illustrative guidelines and may differ depending on your business and the acquiring entity. 

1. Comparison matrix 

Factor	Trade Sale	Private Equity Sale	Initial Public Offering (IPO)
Typical Buyer / Investor	Strategic corporate acquirer in the same or complementary sector	Financial sponsor seeking growth, consolidation or buy-and-build opportunities	Public market investors via a stock exchange (e.g. AIM, LSE Main Market)
Primary Objective (of buyer)	Strategic synergies and benefits (e.g. new capability or technology, global expansion)	Financial return through growth and exit within 3–5 years	Long term value creation and/or dividend payments
Valuation Approach	Often includes strategic premium (based on synergies)	Valuation based on precedent transactions and expected returns	Market-driven, based on earnings and investor demand with the price determined on the day
Deal Structure	100% share sale (can include earn-out or deferred consideration)	Majority or minority investment; founders likely to retain a stake in the business	Sale of new shares (fundraising) and/or secondary shares by existing holders
Founder Role Post-Exit	Usually short transition period (6–12 months) before full exit	Founders often remain in management under PE ownership for 3–5 years	Founders typically stay on as executives or directors post-IPO
Timing to Completion	Typically 3–9 months from process launch	3–9 months depending on due diligence complexity	6–12 months including regulatory approvals and marketing (“roadshow”)
Funding for Growth	Business becomes part of acquirer’s group with some investment for growth likely	Access to follow-on capital from PE for growth initiatives	Public markets can provide ongoing access to capital
Governance & Reporting	Subsidiary governance under buyer’s control	Structured board oversight; increased reporting to investors	High governance, regulatory and disclosure obligations
Key Advantages	Clean exit; potential strategic premium	Retains founder involvement; provides growth capital and partial liquidity. Additional value gained on future exit	Raises profile, provides liquidity and access to public markets
Key Drawbacks	Possible loss of brand identity and independence	Secondary exit still required; potential control loss	Costly, time-consuming, subject to market volatility
Suitability	Best for companies with strong strategic value to acquirers	Suitable for scalable businesses needing capital and professionalisation	Appropriate for mature, stable companies with predictable performance and governance

2. Summary commentary 

Trade Sale 

Generally the most straightforward route, delivering full liquidity to founders and investors. It often attracts a strategic premium where acquirers value synergies or technology. However, it can result in the loss of independence and brand integration within a larger group. 

Private Equity Sale 

Provides an opportunity for partial de-risking while retaining future upside. PE investors bring capital and expertise to drive the next growth phase but typically expect structured governance, performance targets and a clear path to a second exit. 

Initial Public Offering (IPO) 

Offers access to public capital and increased profile but carries significant regulatory and cost burdens. Suitable only when the business has sustainable profitability, robust reporting systems and a management team prepared for public scrutiny.

This information is a non-exhaustive summary of some of the factors which may be relevant to seeking investment in the space sector. Persons should take independent legal and professional advice before seeking any such investment.