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The Hidden Secrets of Selling Your Business for Maximum Value
What you missed on How2Exit This week
Ronald Skelton
February 04, 2025
Sponsors:
DueDilio is your go-to marketplace and advisory service for all things related to small business acquisitions.
Build Your M&A Team
and
Final Ascent, a premier boutique professional services firm specializing in mergers and acquisitions, exit strategies, and growth consulting tailored for lower middle-market firms across the U.S.
E266: From a $5M Offer to a $70M Deal: The Hidden Secrets of Selling Your Business for Maximum Value
About the Guest:
Todd Sullivan is the co-founder of ExitWise, a platform designed to help business owners maximize the value of their exits by connecting them with the best investment bankers, M&A attorneys, and advisors in their industry. A former entrepreneur with multiple exits—including deals with Microsoft and CBS—Sullivan is on a mission to level the playing field for founders and ensure they don’t leave millions on the table when selling their businesses.
Summary:
In this episode of How2Exit, Ronald Skelton sits down with Todd Sullivan, co-founder of ExitWise, to discuss the realities of selling a business and navigating the mid-market M&A landscape. Sullivan shares his personal journey from professional hockey player to serial entrepreneur with multiple exits, culminating in the creation of ExitWise, a platform designed to help founders secure maximum value for their businesses. The conversation is a deep dive into the hidden pitfalls of unsolicited offers, the importance of industry-specific expertise, and the strategic steps business owners must take to prepare for a successful exit. Sullivan shares eye-opening insights, including a case where a client's offer skyrocketed from $5 million to $70 million—just by understanding how to play the game correctly.
Key Takeaways
Unsolicited Offers Are Often Lowball Ploys – Many business owners receive unsolicited offers that seem attractive at first glance but are often far below the company’s true value. Having the right representation can dramatically shift these offers upward.
Preparation Is Key – A successful exit doesn’t happen overnight. Business owners should start preparing two to three years in advance, ensuring financials, operational structures, and data rooms are in order.
The Right Team Makes All the Difference – Choosing industry-specific investment bankers, M&A attorneys, and advisors can increase deal success rates from under 30% to over 85%. These experts not only help navigate the process but also significantly boost valuation.
Understanding Buyer Strategies Is Critical – Buyers are often seasoned dealmakers with playbooks designed to pressure sellers into quick decisions, unrealistic timelines, and one-sided terms. Business owners must learn to control the process and not be rushed into mistakes.
Avoid Letting Ego Kill a Deal – Entrepreneurs can sabotage their own exit by overestimating their company’s worth or refusing strong offers based on emotional attachment. An objective valuation and disciplined approach are essential.
Earnouts and Employment Agreements Need Careful Structuring – Many entrepreneurs struggle when transitioning to employees post-sale. Structuring earnouts correctly can ensure smoother transitions and maximize financial benefits.
The Exit Market Is Shifting – With private equity dry powder moving into lower middle market deals, competition for quality businesses is heating up. Those with strong financials, profitability, and growth potential will command the best multiples.
Confidentiality in M&A Is Vital – Overexposing a deal by engaging too many buyers can damage business value and create unnecessary risks. A strategic, private approach to negotiations is far superior.
Article:
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