What is an exit?
An exit is the sale of a portfolio company to a strategic buyer, another private equity fund or the public markets, returning cash to the fund. The common routes are a sale to a company in the same industry, a secondary buyout by another fund and an IPO. A dividend recapitalization can return some cash earlier, without a full sale.
Why it matters to a revenue leader
Everything in a PE hold points at the exit. Buyers will study recent years of sales results, so the story a revenue leader builds now becomes the story in the sale documents. Forecasts that land, clear renewal data and growth that does not depend on one person all raise what a buyer will pay. Weak data does the opposite, even when the underlying business is sound.
Example
Fictitious numbersAfter five years, a sponsor sells a fire protection platform to a larger fund. The buyer pays 12 times adjusted EBITDA, up from 8 times at entry, partly because 65 percent of revenue now comes from inspection and monitoring agreements with a documented renewal history.
"If we went to market in 18 months, what would a buyer's diligence say about our revenue quality?"
Sources
- Private Equity: Definition, How It Works, and Types checked 9 Oct 2026
- Exit Strategy checked 9 Oct 2026