Running a clean exit from the portfolio
Model the waterfall before you talk to buyers
The preference stack decides whether founders and employees are motivated to complete the sale. Run the waterfall at a realistic range of prices before the process starts. If management receives little at the likely price, agree a carve-out or incentive plan early, so it is not negotiated under pressure when a buyer is waiting. Our investor return calculator (opens in a new tab) is a quick way to test the outcomes.
Keep it confidential
Word that a portfolio company is for sale can damage it quickly: customers hesitate, competitors recruit and staff start looking. We approach a targeted list of buyers under NDA, with a blind teaser first, and control what is shared and when. For board members, it means a process the company can survive if it does not complete.
Governance and a clean close
Venture exits involve more stakeholders than most sales: several investor classes, option holders, board consents and sometimes lenders. We map the approvals, drag-along and consent rights early, so the timetable reflects reality. At completion, the aim is a clean close for the fund: proceeds distributed to the waterfall, limited escrow and warranty exposure, and no residual obligations sitting on the fund after the position is exited.
Frequently asked questions
- What are the liquidity options for a venture-backed company?
- The main routes are a trade sale to a strategic acquirer, a sale to private equity, a secondary sale of existing shares to a new investor, a continuation vehicle for one or more assets, or a structured wind-down or asset sale where the company cannot continue independently.
- How do liquidation preferences affect an M&A exit?
- Preferences decide who is paid first and how much from the sale proceeds. When the price is close to or below the total preference stack, common shareholders and management can receive little, which can stall a deal. A management carve-out or renegotiated waterfall is often needed to keep the team aligned through completion.
- Can Acquiry help with companies that are not performing?
- Yes. Many portfolio companies are sound businesses that no longer fit a venture return profile. A targeted process with strategic or financial buyers can return capital, protect the team and close the position cleanly, on a timetable that suits the fund.