Years ago, when I sold my first company, my co-founder and I wanted different things.
He was going through a divorce. He needed cash, and he wanted a steady job on the other side of the deal. I wanted equity in the company buying us, and I wanted to leave after the deal to start my next one.
We didn’t have to agree on the same deal. What we agreed on was the path forward. Once that was settled, we were able to design a deal that actually got both of us what we needed, and craft a story that made sense to buyers.
That’s the part almost nobody plans for. Founders spend all their energy thinking about the number, the buyer, the timing of the market. Almost nobody sits down and asks the people closest to them a much simpler question: are we actually aligned on what happens when this sells?
Exits Don’t Just Happen
Here’s the thing I say most often, even to people already deep into a process: exits don’t just happen. If you wait until you’re ready to sell before you start preparing, you’ve already lost. And this is true even if you’re not sure you want to sell at all.
Being ready, and knowing you’d get maximum value if you did, isn’t the same as selling. It just means you have the option. Options are where the power sits, whether or not you ever use them.
Most founders only think about one factor when they think about timing, usually just the performance of the business. Revenue up, margins healthy, looks good on paper. That matters, but it’s one piece of five.
The Five Things Worth Thinking Through
- Performance. Not just this year’s numbers, but consistent growth over time, and how you compare to your peers.
- Industry dynamics. Is your space expanding, consolidating, or already past its peak?
- Macroeconomics. Are we in a bull market or heading toward a recession, and does that change when you’d want to sell and how you’d be valued?
- Personal factors. Do you need to sell, or want to, and do you actually know what you’d do the day after?
- Human dynamics. Is everyone close to you, co-founders, key people, investors, actually aligned on the path, even if not the exact outcome?
Most founders can speak to one of these. Almost none have thought through all five.
Try This
Pick the factor on that list you’ve thought about the least. Not the one that’s easiest to talk about, the one you’re not even considering.
Spend twenty minutes writing down where you actually stand on it today, not where you hope to be. If it’s human dynamics, that might mean an honest conversation with a co-founder about what they’d actually want if a deal showed up next month. If it’s personal, it might mean finally answering what you’d do the day after you sold.
None of this means you’re selling anytime soon. It just means that if the option shows up, you’re not scrambling to catch up to a decision you should have already started making.
Being ready is the whole point. Selling is optional.
Want to know exactly where you stand on all five? See how ExitDNA gets you there →
— Mac
