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According to Longenecker et al. (2020), harvesting or exiting is a strategy used by entrepreneurs and investors to get out of their investment in a business, but still, obtain the value of the business. Many entrepreneurs successfully grow their businesses, but fail to develop effective harvest plans and are therefore unable to capture the full value of the business they have worked hard to create. By taking the time to thoroughly plan out a harvesting strategy, entrepreneurs can still maintain the potential growth of the business.

There are four ways to harvest an investment in a privately held firm. The first strategy is selling the firm to strategic buyers, financial buyers, or to employees. Another strategy is distributing the firms cash flows which involve a slow withdrawal of the owners investment so that the owner does not have to find a buyer or suffer the expenses associated with completing a sale of the business. Initial public offering (IPO) is another great harvesting strategy where the company offers stock to the general public which creates ongoing interest in the company and continued development. The last harvest strategy is private equity recapitalization which allows a business owner to sell a portion of the business, but still, retain some equity to take advantage of future growth.

There are several good reasons for an owner of a company to have a harvesting strategy. Having an exit plan can guide the entrepreneur in a position where the company has optimal value in the years prior to the sale and ensure an easy transition to public ownership in the case of an IPO. Exit planning can also prepare the company for rapid sales if a window for such an opportunity should open and close quickly.