An exit, which involves the sale of the startup company to either a strategic buyer, another company, or a financial buyer, such as a later stage Private Equity fund is also a common exit strategy. With this exit the startup company shares are typically sold for a percentage premium over what could be achieved via the IPO. This is often referred to as a control premium. It's what the acquirer has to pay to get control of the whole company. This makes the strategic sales strategy often more profitable for existing investors than an IPO.

Typically, the premium paid buyer, a strategic buyer, is higher than the premium paid by a financial buyer. Since a strategic buyer will be able to combine the startup company with their existing operations to deliver synergies or enhanced growth opportunities, a financial buyer such as a PE fund is unlikely to be able to benefit from any synergies after acquisition unless there's good fit with other portfolio companies. The strategic sale is often an attractive exit route because many large companies seek to create through the acquisition of other companies with new products, new technologies, or new growth opportunities. This type of acquiring company may not prioritize cash flow or profitability from their acquisitions as highly as a financial buyer, and they may be willing to pay more because of this.

A good example is Salesforce, a business to business cloud-based software company. Salesforce is highly dependent on SaaS revenues, which is to say software as a service. Salesforce has strategically acquired over 59 companies. These transactions totaled over $62 billion, and they tended to compliment Salesforce's own offerings and technologies. This meant that when Salesforce was looking for targets, it was probably prioritizing the products and ideas of those targets above the cash flows. For those targets, being bought by Salesforce was probably an attractive prospect because of this.