Microsoft paid over a billion dollars for Yammer. Forty times revenue. Yahoo paid over a billion for Tumblr. Eighty five times revenue. Not profit. Not EBITDA. Revenue.
No one walks into a room and offers forty five times revenue based on anything they find in your financials. Never.
These were strategic exits. Their value came from what the company unlocked for the buyer, not what was on the balance sheet.
It’s not about you. It’s about what you make possible for someone else. That shift is the one most founders never make.
Where the Real Value Hides
Look at the S&P 500, the five hundred largest companies on Earth, and how their value splits between tangible assets (inventory, equipment, real estate) and intangible ones (brand, IP, customer relationships, contracts).
In the 1970s and 80s, about 80% of that value was tangible. Today it’s flipped. Roughly 90% of the S&P 500’s value now sits in things you can’t touch.
Apple isn’t valuable because of the physical phone. It’s the brand, the patents, the code. If that’s true for the most scrutinized companies on the planet, it’s true for yours.
Intangible value looks like this:
- A product that defines its market
- A brand that means something to your buyers
- IP that’s cheap to build and disproportionately valuable
- Exclusive distribution or partnerships
- A customer base other companies want access to
- Contracts, domain names, institutional knowledge your team carries
Financials still matter. Profitable and growing is real, and it’s good. But sell purely on financial metrics and you’re looking at three to five times EBITDA, maybe more, while leaving the rest on the table.
The biggest outcomes go to founders who know what makes their business strategically valuable to someone else. Find the buyer who has to have what you built, and the math goes off the charts.
You’re Only Talking to Half Your Buyers
Knowing your value only matters if the right people see it. Most founders make the same mistake here: they only talk to the obvious buyers. Competitors. Private equity. One or two players in their own industry.
But the biggest outcomes rarely come from inside the industry. Google didn’t buy Motorola Mobility for twelve billion because it needed the revenue. It needed a way into phones to compete with Apple, and buying was faster than building.
An outdoor apparel company once had every obvious buyer at the table, Patagonia, VF Corp, Columbia. The winning offer, more than double what any of them proposed, came from an unrelated venture-backed group that needed a credible outdoor brand to soften its public image. They weren’t buying financials. They were buying what the brand could do for them.
The real buyer list is longer than most founders think:
- Competitors, obviously
- Suppliers, vendors, and large customers
- Adjacent or tangential industries
- Holding companies filling a gap (seasonal, geographic, category)
- Search funds and independent sponsors
- Individuals and family offices, more often than people assume
Start the List This Week
Two things worth an hour each this week:
- Who might actually want this. Not just competitors. Three to five industries you wouldn’t normally consider, each with a real reason attached.
- Where your value actually lives. Beyond revenue and EBITDA. Product, customers, geography, team, and what makes each one hard to replace.
Neither has to be finished. It has to be started. Momentum compounds here, not perfection.
Build this list now, long before you’re selling, and “maybe someone would want us” turns into real names with real reasons. Most founders only start this the week they decide to sell. That’s exactly why so many leave money on the table.
Want help building your buyer list and your exit story? See how ExitDNA gets you there →
— Mac
