UK entrepreneurs are changing the way they cash out of their businesses, as economic uncertainty makes typical exit strategies less attractive, data finds.
A new report from Charles Stanley, developed with Beauhurst, shows that more founders are now choosing to sell part of their stake to investors in a secondary transaction. This allows them to gain some financial return without fully relinquishing control of the business.
Experts say the shift is being driven by slower growth, high interest rates, and a tougher investment climate in the wake of the pandemic.
Exit volume remains above pandemic levels
According to the full Charles Stanley Exits in the UK report, exit activity in the UK remains elevated above pre-pandemic levels. Since 2015, 7,859 high-growth UK companies have exited, with almost 40% of activity occurring in just the last two and a half years.
Predictably, acquisitions account for the majority of exits recorded in the past ten years. Peaking in 2021, a total of 1,110 buyouts took place as more entrepreneurs sold up shop.
Business purchasing has since remained strong, however. 2024 saw the second-highest number of acquisitions across the period, with 1,069.
Many of these have been splashed across the business headlines this year. Fast-growth startups snapped up in 2025 include fitness app Runna, which was acquired by Strava in April, and the eco-conscious cosmetic brand Wild, which was bought by Unilever in March.
In both cases, the firms were acquired by corporate buyers (companies making strategic purchases) rather than by financial buyers (investors hoping to make a return). In 2024, 85.7% of acquisitions were by corporates, while 14.3% were carried out by investors.
What is a secondary transaction?
Acquisitions might rule the roost, but founder-led secondary transactions have become more prominent since 2015. Rising from 650, they peaked at 1,799 in 2022.
Secondary transactions are not technically an exit strategy. They are a liquidity event for both founders and investors, and often occur during later funding rounds, not just at exit stage. But they are like acquisitions in that they allow both parties to cash out.
In this strategy, founders sell their shares in a private company to a new investor, rather than the company issuing new shares to raise money.
This method enables founders (or early shareholders) to access capital without a full exit. Plus, as they only lose part of their stake, the founder can still retain control over the company. This could be why secondary transactions are increasingly viewed as a substitute for full exits.
Cliadhna Law, Head of Direct & Professional Sales at Charles Stanley, comments: “Exits are no longer confined to an IPO or acquisition, and founder secondary transactions have emerged as a key feature of the modern exit environment.
“These deals provide liquidity without relinquishing control, offering a flexible solution for founders and investors as companies continue to remain private for longer.”
You’re not imagining it, IPOs are declining
Another exit strategy that allows the owner to maintain control over the business is an Initial Public Offering or IPO. To jog your memory, IPOs involve taking a private company public by issuing shares to the public for the first time.
2021 was an exceptional year for the IPO market in the UK, both in terms of the number of companies listing and the amount raised. But the current state of the market leaves much to be desired. As Charles Stanley data shows, UK IPOs have reverted to historically low levels.
Q1 2025 has only seen five IPOs, raising a combined £74.7m in proceeds. High-profile tech companies such as Just Eat and Wise have also both shunned the UK market in recent months, with the former moving to Amsterdam and the latter to New York.
In May, one of the London Stock Exchange’s biggest underperformers Deliveroo, was purchased by US rival DoorDash after it struggled to maintain profitability in old blighty.
That founders are increasingly turning away from traditional exits such as IPOs tells us that many are sensing the risks outweigh the rewards in today’s economy.
With public markets less receptive, secondary transactions offer a compelling alternative for founders to boost their cash flow without exposing themselves to market volatility.