- September 16, 2026
- Posted by: vitalclick
- Category: Venture Capital
For many South African entrepreneurs, an exit can seem like a distant concern, reserved for a time when the business has matured and the founder is ready to move on. But experienced founders are increasingly taking a different approach: planning for an eventual exit from the outset.
Source: Supplied. Thato Ntseare, head of Venture Investments at E Squared Investments.
Far from signalling the end of the journey, exit planning can shape how a business is built, encouraging stronger structures, greater resilience and scalability. By creating these foundations early, founders can preserve flexibility and position their businesses to realise value when the right opportunity arises.
For investors, this translates into realising this value responsibly over time.
Exits should therefore be understood as part of a broader value-creation approach: one that strengthens governance, deepens operational resilience, improves strategic optionality and prepares companies for the right partnership, transaction or liquidity event when the timing is appropriate.
E Squared’s model illustrates this distinction. As a permanent-capital investor, E Squared is not compelled to sell according to a fund-life timetable. Value can be realised when the business, the market and the operating model are ready, rather than when a fund term dictates. This is why the emphasis is often on value realisation rather than exit alone.
In 2025, R31m of realised returns came from partial realisations in businesses E Squared continues to hold, reflecting an approach where liquidity and continued ownership can co-exist when this best supports long-term growth.
Why exit planning matters
South Africa’s entrepreneurial ecosystem is innovative and resourceful, yet often informal in structure. Many businesses are built in response to immediate opportunity, with less emphasis on long-term systems in the early stages. While this enables agility, it can create constraints as businesses scale.
Early exit planning introduces discipline at the foundation level, strengthening financial reporting, governance and operational processes. These are not only important for a potential transaction, but for building a durable business.
This is why E Squared treats exit readiness as part of its post-investment value-creation work rather than as a late-stage exercise. The Value Creation Plans agreed with seed and growth-stage ventures set out the governance, financial management and execution capabilities a business will need to attract a future partner or acquirer. The same capabilities make the business more resilient in the meantime, whether or not a transaction ever materialises.
In a context shaped by economic volatility and shifting market conditions, exit planning also plays a role in managing risk. Founders often have a significant portion of their wealth tied to a single business. Considering exit pathways, whether partial or full, allows for diversification and creates optionality over time.
In addition, the right partner can bring capabilities beyond capital, including operational expertise, distribution access and technology, enabling businesses to scale more effectively.
Who should be thinking about an exit?
Exit planning, or value realisation planning, is relevant for all founders and entrepreneurs building businesses with strong growth potential, regardless of the sector. It is equally relevant for investors, whether providing debt, equity or other instruments, as it shapes how value is created and eventually realised. E Squared applies the same lens when it backs fund managers through its Fund of Funds strategy, where a manager’s record of realising value for investors weighs heavily in the assessment.
South Africa’s venture capital industry now manages R15.45bn across 1,529 active portfolio investments, according to the 2026 SAVCA VC Survey, and the first generation of venture-backed companies is reaching the stage at which exits become realistic. The evidence that South African exits can deliver is also becoming clearer.
Research released in July 2026 by the SA SME Fund, Endeavor South Africa and SAVCA analysed 226 realised exits reported by local venture capital fund managers since 2009 and found capital-weighted realised returns of between 2.0 and 2.5 times invested capital, broadly in line with more mature markets.
A case study sample of 18 venture-backed exits recorded a median money multiple of 3.5 times, and the exited companies created more than 4,000 direct jobs between them. Nedbank’s acquisition of iKhokha for approximately R1.65bn in 2025 is the most visible recent example of a South African acquirer paying for a business that had built the infrastructure, governance and customer base that exit readiness demands.
As industries mature, consolidation becomes more common. Businesses that have invested early in governance, financial discipline and clear structures are better positioned to navigate these shifts.
Partial exits are also becoming more prevalent. In sectors such as FMCG, founders are increasingly partnering with investors to access manufacturing, distribution and expansion opportunities while retaining strategic control. E Squared’s own realisations to date have come predominantly through partial exits of this kind rather than outright sales. In these transactions the business has continued to operate and grow, and E Squared has retained a stake in that growth.
Building with the end in mind
Exit planning is often associated with stepping away. In practice, it is better understood as creating options.
For South African founders, this means building businesses that are not only capable of growth, but resilient in the face of uncertainty. It allows for flexibility in how and when value is realised, while supporting continuity over time.
At E Squared Investments, the focus remains on supporting businesses that are built with intention, where structure, governance and long-term thinking underpin growth. In this context, exits are rarely unexpected, but rather the result of deliberate choices made over time.
As E Squared reinvests realised returns into new ventures, every value realisation also funds the next generation of responsible entrepreneurs. In that sense, an exit is not the end of E Squared’s involvement in the ecosystem, but part of how capital is recycled into the businesses that follow.