Preparing the Exit
Financing growth is a critical component of any business expansion strategy, determining how a company funds its investments in new products, markets, or operations. Growth can be financed through internal funding (retained earnings and operational cash flow) or external sources such as debt, equity, or hybrid instruments. Internal financing offers control and flexibility but may limit the pace of expansion. External financing—through bank loans, lines of credit, venture capital, private equity, or public offerings—can accelerate growth but often requires sharing ownership, profits, or decision-making authority.
The optimal financing structure balances risk, cost, and control. Debt financing preserves ownership but increases financial leverage and repayment obligations, while equity financing provides permanent capital at the expense of dilution. Many firms adopt staged financing, raising capital incrementally as milestones are achieved, to align investor confidence with performance.
Effective growth financing also requires robust financial forecasting, capital budgeting, and clear accountability for returns on investment. Businesses that pair strategic funding with disciplined capital deployment gain the flexibility to scale operations, pursue acquisitions, and strengthen competitive advantage—while maintaining financial stability and long-term shareholder value.
Your exit transaction will depend on a strong balance sheet and strong earnings. Remember that EBITDA matters more than revenue. Company valuation at exit will in large part be calculated based on your predictable future cash flows.
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