Exits and wind downs
An exit refers to any event whereby investors realise a return on their investment - positive or negative - such as the sale of the investee company, an initial public offering or a wind down of the business. Odin is well-equipped to handle the admin surrounding these events.
Please note that all exits should be handled by Odin - Any documentation that needs to be signed on behalf of the SPV may only be signed by an authorised signatory of Odin. You should not sign any documentation on behalf of the SPV and should consult with us if you are unsure about the process.
As soon as Odin is notified about an exit, Odin will understand the nature of the exit and the available options for you and your investors.
- -
Types of exit & process overview
- Acquisition - The majority of exits we see are full acquisitions of the company’s share capital by another company. In this scenario, it is generally simpler to be sent a drag-along notice rather than signing any documents, but if legals need to be signed, we may require approval from underlying investors. As with investment agreements, all communication here needs to be with legal@joinodin.com.
- Secondary (partial or whole) - The other common scenario is for there to be a partial or full acquisition of shares held by the Odin SPV by a third party, typically as part of a new financing round, by a new investor who is also purchasing primaries from the company as part of the round. Again, permission needs to be sought from investors in order to sell shares, and investors in a typical Odin Bare Trust structure can opt in or out of selling their stake. In other structures (BVI SPV, GP-LP), full discretionary control sits with the lead.
- IPO - In an IPO, shares are listed on an exchange. Typically, shares are delivered into a brokerage account Odin sets up on behalf of investors, rather than to investors directly. The lead's carried interest is settled in shares by default: the relevant number of shares is allocated to the lead, who can later instruct a sale. Investors' remaining shares are held in the brokerage account unless they instruct Odin to sell some or all of them. Any administrative costs for this process are borne pro-rata by the investors.
- Wind Down - In this scenario, the company has decided to cease trading and return any available funds to investors. Typically, after administration costs, there is little or no capital to return to investors, and no carried interest is payable.
- -
Exit calculations (inc. carried interest) and distribution
Before any funds are distributed to investors during an exit, a full calculation of returns and any applicable carry is completed by our Deal Operations team. This is shared with you for approval, after which the exit is processed.
Post-approval, we share exit documentation with investors and allocate funds to their Wallets on the Odin platform. From there, investors can withdraw funds to a bank account in their name or keep them in their Wallet for further investment in deals they're invited to.