Exit strategy, also referred to as a "harvest strategy" or "liquidity event",  is the method by which a venture capitalist intends to get out of an investment. It is a way of "cashing out" an investment.

 It's difficult for venture capital investors to get money out of an investment because they are generally dealing with private companies. Shares of private companies cannot be sold as easily as when the firm is publicly traded on a stock exchange. So, even though a private startup firm could be worth a fortune, the VC investors has limited access to this wealth.

Broadly speaking, the exit strategy is the first opportunity to trade shares in a private firm for cash.

Examples of exit strategies include an initial public offering (IPO) or being bought out by a larger player in the industry. An exit strategy is usually a part of a formal venture financing deal.  >>>