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500-Day Plan

Sooner or later, every private equity investment culminates in exit. But a sale doesn’t happen overnight. In fact, it takes about 18 months or more to get a business ready for sale. Like the 100-day plan, the 500-day exit plan offers a detailed, easy-to-use road map that can ensure the divestiture goes smoothly.

One of the benefits of planning early is that firms have time to identify and correct any issues that might turn off a potential buyer. There are, of course, many ways that exits can go wrong, but most problems can be avoided by closely managing the exit process.

Leading Cause of Failure: Price Misalignment

The most common reason deals fall through is price misalignment, when a seller thinks the company is worth more than the buyer. While there’s always some back and forth when it comes to price, the two sides shouldn’t be so far apart that a deal can’t be made.

There are three underlying causes of price discrepancies. How can you avoid them? Take a look.

Doubt Over Value Potential

Suboptimal Exit Preparation

Disagreement on Market View

Putting the 500-Day Plan into Action

A 500-day plan approaches divestiture from two angles: a top-down review, followed by a value-creation plan for exit. Together, they outline six steps to exit.

Financial Benchmark

Strategic and Risk Review

Buyer Perspective

Identification and Prioritization of Initiatives

Road Map and Equity Story

Implementation of Initiatives

Principal Investors & Private Equity
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