Exit Preparation
Why Exit Preparation Matters
Without systematic exit preparation, portfolio companies enter sale processes with undocumented capabilities, unclear growth stories, key person dependencies, and gaps that buyers discount. Management teams can't articulate GTM advantages or defend growth projections with data and process.
With comprehensive exit preparation, portfolio companies enter sale processes with documented commercial capabilities, compelling growth narratives backed by data, demonstrated scalability, eliminated key dependencies, and buyer-ready capabilities that command premium valuations. Preparation typically adds 20-40% to exit value.
Key Components
Growth Story Development
Craft compelling growth narratives backed by data, market analysis, and demonstrated execution. Help buyers envision future value creation potential and justify premium multiples.
GTM Maturity Advancement
Document and demonstrate mature sales processes, marketing systems, customer success programs, and revenue operations. Prove capabilities are repeatable and scalable, not person-dependent.
Scalability Demonstration
Show that growth can accelerate without proportional cost increases. Demonstrate operating leverage through processes, systems, and organizational design that enable efficient scaling.
Key Person Risk Elimination
Reduce dependencies on individual salespeople, leaders, or relationships. Document knowledge, systematize processes, build bench strength. Buyers discount for concentration risk.
Buyer-Ready Capabilities
Ensure CRM data quality, document processes, create organizational charts, build metrics dashboards, and prepare due diligence materials. Remove buyer concerns before they arise.
Pipeline & Momentum Building
Enter sale process with strong pipeline, recent wins, positive momentum, and visible growth trajectory. Time exits for when story is strongest and momentum is clearest.
Key Takeaways
- • Exit preparation should begin 12-18 months before anticipated sale process-not 90 days before launch
- • Buyers pay 30-50% premiums for demonstrable commercial excellence capabilities vs. companies with similar revenue but weaker capabilities
- • Most valuable exit preparation is addressing known weaknesses-CRM data quality, sales process documentation, pipeline visibility
- • Strategic buyers value different capabilities than financial buyers-tailor preparation to likely buyer profiles
- • Strong recent momentum and visible growth trajectory justify forward-looking valuations-time exits strategically