Tips for Achieving Exit Success

You’re saving money on taxes but leaving millions on the table. Most business owners get finance strategy half-right. They’re laser-focused on tax minimization and miss the bigger picture: exit value. I worked with an engineering firm that had strong revenue but couldn’t figure out why buyers weren’t interested. On the surface, everything looked solid. But once we dug into the details, a few things were quietly dragging down the value. Here’s what we changed, and how you can set your business up for a better exit: 1) Smooth out your financials • Standardize how you recognize revenue across all projects • Avoid lumpy or irregular income reports • Make your numbers easier for buyers to trust 2) Pay yourself the right way • Set your salary at fair market value • Separate distributions from base compensation • Keep payment structure clean and buyer-friendly 3) Separate real estate from operations • Move owned property into a different entity • Create a clear, market-rate lease • Let buyers see the business on its own 4) Clean up non-business expenses • Remove personal spending from company books • Reclassify anything that’s not operational • Show a true and credible EBITDA 5) Improve your cash conversion cycle • Tighten up your collections process • Renegotiate vendor terms where possible • Aim for faster cash flow without more sales 6) Align team incentives with growth • Tie bonuses directly to EBITDA performance • Remove vague or inconsistent goals • Make incentives meaningful and measurable 7) Formalize all client agreements • Use clear, updated contracts for every engagement • Standardize pricing and terms • Add renewals to boost recurring revenue The result: EBITDA increased by 22 percent. Valuation multiple rose from 4X to 5.5X. Enterprise value grew by $1.2 million. No new clients. No extra overhead. Just a smarter financial story. Tax strategies help in the short term, but clean financials build long-term value. If your numbers don’t tell a clear story, buyers walk.

Things I Wish I Knew Before Exiting My DTC Brands. I sold my first DTC brand in 2011. Since then I've sold several more. Here are the things I wish someone had told me earlier: • QSBS Tax Benefits - Qualified Small Business Stock can save you millions. Live in a state that honors it (sorry, California residents). Structure your company correctly from day one to qualify. This will be your biggest win. • Skip the Popup Discount Trap - Those entry popups giving 10-15% off are killing your margins. Build value through content instead of subsidizing first purchases. • Lifecycle Marketing First - Before spending a dollar on Meta, implement a solid lifecycle marketing program across email, SMS, and direct mail. Your owned channels will drive sustainable growth. • CEO Role Evolution - Once you're out of founder mode, your job becomes threefold: 1) set culture and vision, 2) build a great leadership team, and 3) nurture external relationships. That last one will help you exit (have corpdev and PE on speed dial to optimize your exit, don't play catch up here). • Customer Obsession - Focus on your best customers (your "whales"). Get to know them intimately, build programs specifically for them, and acquire more people like them. The 80/20 rule is real. • RFM Segmentation Works - Segment customers by Recency, Frequency, and Monetary value. Target your whales and win back your defectors. This simple framework transformed multiple businesses I've run. • DTC Is Just a Channel - Always think beyond your website. Explore wholesale, retail partnerships, and marketplaces to reduce CAC and expand reach. • Brand Building Pays Off - Building a strong brand feels expensive short-term but dramatically reduces CAC long-term. Your most valuable asset in an exit conversation will be brand equity. • Full-Funnel Direct Mail - Don't overlook physical mail - it cuts through digital noise with 80-90% open rates. Use it for acquisition and retention. Some of my highest ROIs have come from targeted postcard campaigns. • Omnichannel Presence - Be everywhere your customer is. Your brand should show up consistently across platforms your customer trusts. • Focus on Post-Purchase - Most brands obsess over acquisition but neglect what happens after the sale. The easiest customer to convert is the one you already have. My first exit was life-changing, but I left money on the table because I didn't know these fundamentals. Now I build differently. What lessons have you learned from building and exiting companies? Drop your wisdom below. And if you're building a DTC brand with aspirations of an exit, check out my guide to ecommerce Turnarounds. Comment ↩️ and I'll DM you the link.

🚀 Ready for a Buyer to Knock on Your Door? Here's the Secret to a Regret-Free Exit! 🚀 Picture this: Your business is booming. Revenues are growing. Out of the blue, a buyer shows interest. Are you ready to seize the opportunity? Let's break down the three key elements for a successful, regret-free exit. They’re more connected than you think! 💡 1️⃣ Business and Management Readiness 🏢 Your business is thriving. But is your management team prepped to handle the reins? Meet Sarah. She went down the path to sell her company, but her management team and natural successor weren’t ready. She enjoyed being the best salesperson, customer service resolution advisor, and urgent delivery driver. With the distraction of the sale process, the business struggled. Sarah was focused on the demands of the prospective buyer, who eventually walked away, seeing it wasn’t the business it initially looked like and too reliant on Sarah. Sarah regretted not investing more in leadership development. When the buyer knocked, she missed out on achieving the deal. 2️⃣ Personal Finances and Infrastructure 💼 A buyer’s interest can mean a financial windfall. But without a solid financial estate and tax plan, you might stumble. John learned this lesson. He exited his business but had done limited estate, tax, and financial planning. The tax impact of the deal terms and his lack of personal infrastructure took a large bite out of what he had been paid. Robust financial and tax planning would have helped him leverage the benefits of the deal to its fullest potential. 3️⃣ Mental Readiness for You and Your Family 🧠 Selling your business is a life-changer. Are you emotionally prepared to let go? Is your family ready for the shift? Lisa sold her company but wasn’t mentally prepared. She struggled to let go. Her family also struggled to adapt. Her sudden desire to travel and vacation wasn’t part of their plans. If they had been ready, they could have embraced the change and enjoyed the benefits sooner. When these three elements align, you're not just ready for a buyer—you’re ready to maximize the deal and confidently step into your next chapter. Ignore one, and you risk missing out on the opportunity of a lifetime. So, business owners, if a buyer knocked on your door today, would you be ready to answer? 💬

Most founders are chasing growth. Smart founders are building for exit. The difference? Brutal clarity. Here are the 10 truths I’ve seen in 1,800+ businesses and $5M+ deals: . 1. Revenue is vanity. Profit is sanity. Cash is reality. I’ve seen practices doing $2.4M a year struggle to stay afloat. And ones doing $700K pull $300K+ in clean personal cash flow. You don’t exit on top-line. You exit on what you keep. 2. If your business can’t run without you, it’s not a business. It’s a job. And buyers don’t buy jobs. The more your company depends on you, the less it’s worth. 3. Systems scale. Hustle burns out. A great team is helpful. But buyers don’t invest in people they can’t retain. They invest in systems that work, with or without you. 4. No buyer pays for potential. They don’t care about your “vision” or how hard you work. They buy repeatable results, clean margins, and stable cash flow. If it’s not in your P&L, it’s not in your valuation. 5. Most owners wait too long to sell. By the time burnout kicks in, performance starts slipping. Margins thin, culture cracks, and value drops. Your window to exit strong doesn’t stay open forever. 6. Burnout gives buyers leverage. I’ve seen deals lose 30% of their value just because the seller was tired. Desperation is visible. And expensive. Start preparing before you feel the pressure. 7. If your name is the brand, you’re the risk. When clients and ops rely solely on you, that’s not value — that’s fragility. A transferable business doesn’t need your face on everything. 8. Messy financials kill deals. If your P&L is full of personal expenses and inconsistent records, expect low offers. Clean books = higher valuation and faster close. 9. Valuation is logic. Exit is emotion. Deals fall apart not because of numbers, but because of fear, ego, or lack of preparation. Mindset is half the exit strategy. 10. Growth without profit is expensive chaos. Doubling revenue without tightening ops or cost control just doubles stress. Scale what works — not what breaks. Your exit is not just a financial event. It’s the reward for everything you’ve built. Prepare like it’s the most important deal of your life. Because it is. Whether you want to scale, exit, or finally stop babysitting your business... I help founders get clarity, structure, and cash. 40+ years. 1,800+ businesses. $5M+ exits. Let's build something sellable. 📞 Book a complimentary strategy session 👉 https://lnkd.in/gSYNqw-P

Friend: "I got an amazing offer! 50,000 shares!" Me: "What's the total outstanding shares?" Friend: "Um... I don't know" Me: "What type of shares are they?" Friend: "Not sure..." Me: "When can you sell them?" Friend: "I should probably ask..." I've had this conversation at least seven times in the last year, and here's the playbook I usually share with those friends. 1/ Understand the type of equity Not all equity is created equal: ↳ RSUs are actual shares that vest over time ↳ Stock options let you buy shares at a set price ↳ Preferred vs common stock have different rights 2/ Know your vesting schedule The classic is "4-year vest with a 1-year cliff" Translation: You get nothing if you leave before year 1 Then you get 25% after year 1 And ~2% each month after But don't assume this is standard. Always ask: ↳ What's my vesting schedule? ↳ Are there acceleration clauses? ↳ What happens in an acquisition? 3/ Get the full picture before discussing numbers Ask for: ↳ Total shares outstanding ↳ Latest 409A valuation ↳ Investor preferences ↳ Prior funding rounds ↳ Expected exit timeline 4/ Model different scenarios Don't just focus on the "we IPO at $10B" dream. Model out: ↳ Down round ↳ Flat round ↳ Modest growth ↳ Hyper growth ↳ Acquisition 5/ Understand the downsides If you're getting options, know that you might have to: ↳ Pay to exercise them (could be $$$$) ↳ Hold them for years before selling ↳ Pay taxes before seeing any gains ↳ Lose them all if you leave too soon 6/ Negotiate the details, not just the number Key terms to discuss: ↳ Early exercise options ↳ Extended exercise windows ↳ Acceleration triggers ↳ Refresher grants ↳ Tax implications 7/ Plan for the "what ifs" ↳ What if the company gets acquired? ↳ What if I need to leave early? ↳ What if the next round is a down round? Pro tip: Email these questions to the recruiter. Create a paper trail. Get the answers in writing. Remember: Equity can be life-changing. But it can also be worth zero. Your job isn't to be optimistic or pessimistic. It's to be realistic. What other equity negotiation tips would you add?

𝗘𝘅𝗶𝘁 𝗥𝗲𝗮𝗱𝗶𝗻𝗲𝘀𝘀 𝗦𝘁𝗮𝗿𝘁𝘀 𝘄𝗶𝘁𝗵 𝗮 𝗚𝗖 Your portco is heading for a high-valuation exit. Then due diligence uncovers a compliance gap. Valuation drops by millions. Deal terms shift. Momentum stalls. This isn’t a hypothetical. I’ve seen it happen. Too often, it starts with treating legal as an afterthought. In fast-growing portcos, it’s easy to focus on scaling revenue and operations while assuming legal risks can be handled later. But that mindset can backfire when exit time comes around. In my experience, some PE firms zero in on growth and operational improvements, assuming legal exposure can be managed reactively. Top-performing firms take a different approach. They build legal strategy into exit planning from day one. 𝗪𝗵𝘆 𝗜𝘁 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 A well-positioned GC keeps the legal foundation strong from acquisition through exit. Whether it’s protecting IP, maintaining compliance, or cleaning up contracts, they reduce the risk of last-minute surprises that can tank valuation. 𝗛𝗲𝗿𝗲’𝘀 𝗪𝗵𝗮𝘁 𝗜𝘁 𝗟𝗼𝗼𝗸𝘀 𝗟𝗶𝗸𝗲 I’ve seen this dynamic play out across sectors, especially in highly regulated industries like healthcare, tech, and financial services. The GCs who lay the groundwork early often make the biggest difference during diligence. One example: a GC I placed at a PE-backed healthcare company built a compliance framework early in the hold period. When exit time came, the buyer’s diligence team found no red flags. No gaps in data privacy, regulatory compliance, or contract integrity. The result: a smooth deal at the targeted valuation. 𝗞𝗲𝘆 𝗩𝗮𝗹𝘂𝗲 𝗗𝗿𝗶𝘃𝗲𝗿𝘀 • 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗣𝗿𝗲𝗽: GCs surface and solve potential deal-breakers long before bankers draft the CIM. • 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: Ongoing oversight helps neutralize liabilities before buyer scrutiny. • 𝗦𝗺𝗼𝗼𝘁𝗵 𝗘𝘅𝗶𝘁𝘀: Strong governance boosts buyer confidence and supports stronger exit multiples. • 𝗗𝗮𝘁𝗮 𝗜𝗻𝘀𝗶𝗴𝗵𝘁: Portcos with a dedicated GC see 15% higher exit multiples on average (2024 PE industry data). 𝗧𝗵𝗲 𝗗𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲 𝗧𝗼𝗽-𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗶𝗻𝗴 𝗙𝗶𝗿𝗺𝘀 𝗠𝗮𝗸𝗲 Top-performing PE firms don’t treat legal readiness as a final checklist item. They treat it as infrastructure, baked into the business from the start. We’ve placed GCs who integrated compliance into day-to-day operations. So when buyers started asking questions, there were no fire drills. Just clean answers. At MLA, we’ve partnered with PE sponsors to place GCs who positioned their companies for exit and protected valuation when it mattered most. What’s the biggest legal challenge you’ve faced preparing a portco for exit? #PrivateEquity #ExitStrategy #GeneralCounsel

7 steps every CEO must take before selling I’ve coached hundreds of CEOs through exits. The biggest mistake I see? Skipping the prep. Most CEOs jump straight to the offer. Before the business or the CEO is ready. Here’s the process I walk leaders through: 1️⃣ Gather business information If you can’t explain it, you can’t sell it. 2️⃣ Due diligence Clean up every corner. No surprises later. 3️⃣ Final valuation You can’t negotiate what you don’t understand. 4️⃣ Match with the right buyer Don’t chase the highest bid. Find the best fit. 5️⃣ Negotiate the terms This is where value is built or destroyed. 6️⃣ Sign the agreement The real risk is in what’s not written. 7️⃣ Plan the transition If it’s chaotic, the deal won’t last. This is where most leaders go wrong: They try to exit without structure. But if your business can’t run without you, you don’t have a business. You have a job. Build the system before you sell. Because your exit will expose your execution. If you can’t measure it, you can’t improve it. ♻️ Repost to help another CEO exit right. P.S. Which step would slow you down right now?