Over the last 20 years in venture, I’ve watched founders get intentional about exit value far too late. They’re busy in heads-down execution mode, making the short-term calls the moment demands. But when it’s time to sell, the number is often impacted by a handful of choices nobody flagged as important years earlier.
It breaks my heart when founders wait too long to engineer their exit, and by then the levers that could have boosted the outcome may already be out of reach. Let’s walk through five steps you can start today to avoid leaving value on the table.
1. Choose your multiple enhancers
A dollar of revenue is not always worth the same dollar.
As most founders know, companies sell at a multiple of something, usually revenue or profit or both. The often overlooked piece is that the multiple itself can be optimized just like the top and bottom lines. The question isn’t only, “how can I boost growth?” It also should include, “how can I grow the things that buyers will pay the highest multiple for?”
Exit multiples can range wildly, so it’s important to try to move from the low end of your category’s range toward the high end. One surefire path is the nature of the revenue itself. Buyers generally pay more for software revenue than services revenue, for example. Similarly, contracted or recurring revenue gets a multiple boost over dollars that have to be sold each month.
Other multiple enhancers include market leadership, a defensible moat, an accelerated growth rate, an A+ team, low client concentration, and high retention rates. Defensible IP, a high visibility brand, and a growing market can also increase the multiple dramatically.
Pick the enhancers your business can realistically own, then build toward them on purpose.
Ask yourself: Which two or three enhancers can we own outright, and what changes this quarter as a result?
2. Know your must-wins
It’s tough to watch a founder learn their must-wins from a buyer’s diligence list, when there’s almost no time left to go fix them. In my experience as a founder and a VC, I’ve seen two must-wins that can make a huge difference when addressed early and often:
Client concentration. If one customer owns more than half your revenue, a buyer may see a hostage situation, and knowing that early changes how urgently you go win the next logo.
Rule of 40. A useful mental model here is simple arithmetic, where your growth rate plus your profit margin should add up to more than 40.
A company growing 25% with 20% margins lands at 45 and clears the bar comfortably, while a company growing 10% with 5% margins lands at 15 and isn’t really in the conversation. Rule of 40 companies are generally more likely to sell and more likely to sell at a higher price.
Other must-wins worth naming early include gross margin health, low churn, clean audited financials, tight employee and customer contracts, and a company that can hum along without the founder in every meeting.
Missing one must-win doesn’t necessarily preclude a great exit. The discipline is naming them out loud, then letting them cascade into your annual plan, your quarterly plan, your weekly priorities, and your next three hires.
Ask yourself: Which must-win is getting the least attention? What is one change we can make within the next 30 days to advance our must-win performance?
3. Understand the power of scale
As any young groom can testify, three one-carat diamonds cost less than one three-carat diamond. For founders, scale can be a multiple enhancer all by itself, because the same business often gets valued higher simply for being bigger.
A large part of that is the buyer pool. Private equity funds have a minimum check size they’re willing to write, and strategic acquirers have a floor below which a deal isn’t worth the integration work, so every threshold you cross opens a fresh set of doors. Somewhere around $10M in revenue a new group of buyers starts paying attention, another set arrives near $25M, and the field tends to widen again around $50M, though the exact lines move quite a bit by category.
Below those numbers, the feedback in an M&A process is often some flavor of “cool company, but too small for us.” That one stings, since nothing is actually wrong with the company you built. It’s a compliment attached to a no.
Ask yourself: What’s the nearest scale threshold, and what would we have to change to cross it a year sooner?
4. Build a future org chart
Buyers underwrite your team as much as your numbers, and when the company centers on one or two key people, they see a risk they have to pay to fix. That risk usually shows up as a lower price, or as an earnout that keeps you working for the new owner for years after the deal you thought was your exit.
Ask a founder for the org chart and you’ll generally get today’s version, a snapshot of where things stand this morning. I suggest you also build a second one, showing what the chart needs to look like a year out and, ideally, on the day you put the for-sale sign out. A company that doesn’t need a COO today may well need one within a year or two, which is an argument for starting that search while you can still be choosy about who you get.
Buyers tend to look hardest at a finance leader who can survive diligence, a sales organization that doesn’t run through the founder’s relationships, a product lead who owns the roadmap, and a second layer underneath each of them so no single departure leaves you wobbly.
Staffing into the future version means that when a buyer walks in, you already are the company you’ve been describing. Begin searches early and hire toward your future plan, not just today’s burning needs.
Ask yourself: If a buyer met our leadership team next quarter, which seat would worry them first? What is one thing we can do in the next 30 days to make that seat less founder dependent?
5. Build buyer personas alongside customer personas
I love watching a founder realize their eventual acquirer has been sitting in plain sight the whole time, usually as a partner, a competitor, or somebody who already sells to the same customers.
You’ve probably poured real effort into your Ideal Customer Persona (ICP), mapping the decision criteria and how they buy. The same exercise works on the people who might one day buy your whole company, and it pays off because different buyers want different things from you.
Private equity is one persona, and they tend to care about predictable cash flow, clean financials, and a management team that can scale without you. Strategic acquirers might be three or four distinct personas, and each one is usually buying a specific gap in their own business, whether that’s your technology, your customer list, your team, or your foothold in a market they’ve been trying to enter for years. Build a page on each, and you’ll start to see how differently they’d value the same company.
Once those personas exist on paper, include them in the consideration set on the big decisions, the same way you already think about how the decision will impact your customers. The partnership you sign, the market you enter, or the integration you build, start looking different when you know who might be watching.
Ask yourself: Which acquirer would find us most interesting today, and what would they want to see that we don’t have yet? What buyer persona is most likely to pay the highest price when we seek an exit in a few years?
THE EXIT READINESS SCORECARD
Score yourself honestly, since a low number today is worth far more to you than a flattering one.
Rate each category from 1 to 5, where 1 means it isn’t on our radar, 3 means we’ve acknowledged it, and 5 means we’re actively engineering it.
| Category | Score |
| Multiple Enhancers — named, chosen, actively built toward | |
| Must-Wins — defined and cascading into current plans | |
| Scale Trajectory — clear line to the next threshold | |
| Future Org Chart — hiring against where you’re headed | |
| Buyer Personas — specific acquirers identified and understood |
How to read your total:
22–25: You’re building with the end in mind, so keep the pressure on.
17–21: You’re pointed the right way with gaps in the execution. Pick your lowest score and go fix that one this quarter.
16 or below: There’s real value sitting on the table, and every point of it is still yours to go claim.
FINAL THOUGHTS
I’ve never met a founder who regretted starting this work early, though I’ve sat with plenty who wished they had.
Founders who wait for sale mode often get two disappointments at once, a lower probability of closing and a lower number when they do. These five steps cost almost nothing to adopt today, because they’re a lens you hold up to the decisions already sitting on your desk rather than a separate workstream or a new line in the budget.
Fold them in now, and you become more likely to sell and more likely to sell at the number you’ve had in your head all along.
