Exit Planning Framework

Generate a comprehensive business exit readiness plan. Covers valuation prep, buyer targeting, due diligence readiness, timeline planning, and post-exit transition.

Usage

"Build me an exit plan for my SaaS company"
"Assess my business exit readiness"
"Create a 24-month exit preparation roadmap"

What You Get

1. Exit Readiness Score (0-100)

Rate across 8 dimensions:

• Revenue Quality (25 pts): Recurring %, concentration, growth trajectory
• Financial Hygiene (15 pts): Clean books, GAAP/IFRS compliance, audit-ready
• Customer Metrics (15 pts): NRR >110%, logo retention >85%, diversification
• Team Independence (10 pts): Can it run without founder for 90 days?
• IP & Moat (10 pts): Patents, proprietary tech, switching costs
• Legal Clean Room (10 pts): No pending litigation, clean cap table, contracts assigned
• Growth Story (10 pts): TAM expansion, product roadmap, market position
• Operational Maturity (5 pts): SOPs documented, systems automated, KPIs tracked

2. Valuation Range Estimator

SaaS Multiples (2026 benchmarks):
| ARR Growth | NRR >120% | NRR 100-120% | NRR <100% |
|-----------|-----------|-------------|-----------|
| >40% | 12-18x ARR | 8-12x ARR | 5-8x ARR |
| 20-40% | 8-12x ARR | 5-8x ARR | 3-5x ARR |
| <20% | 5-8x ARR | 3-5x ARR | 2-3x ARR |

Services/Agency Multiples:
| EBITDA Margin | Growing >20% | Growing 10-20% | Flat/Declining |
|-------------|-------------|---------------|----------------|
| >25% | 6-10x EBITDA | 4-6x EBITDA | 3-4x EBITDA |
| 15-25% | 4-6x EBITDA | 3-4x EBITDA | 2-3x EBITDA |
| <15% | 2-4x EBITDA | 2-3x EBITDA | 1.5-2x EBITDA |

Ecommerce/DTC: 3-5x SDE (sub-$5M), 4-8x EBITDA ($5M+)

3. Buyer Landscape Map

Strategic Buyers (highest multiples):

• Competitors seeking market share
• Adjacent companies wanting your vertical/capability
• PE platform companies doing roll-ups
• International companies entering your market

Financial Buyers (PE/Growth Equity):

• Lower middle market PE ($10M-$100M enterprise value)
• Growth equity ($5M-$50M revenue companies)
• Search funds ($1M-$10M EBITDA targets)
• Family offices (patient capital, flexible structure)

Individual Buyers:

• ETA searchers (MBA-backed acquisition entrepreneurs)
• Industry operators looking to buy vs build
• SBA loan-backed buyers (up to $5M)

4. Pre-Exit Checklist (24-Month Countdown)

Month 24-18: Foundation

• [ ] Engage M&A advisor or investment banker
• [ ] Quality of Earnings (QoE) pre-assessment
• [ ] Clean up financials — separate personal, normalize add-backs
• [ ] Document all revenue streams with proof of recurring nature
• [ ] Update or create operating procedures for all core functions
• [ ] Resolve any legal issues (IP disputes, employee claims, contract gaps)

Month 18-12: Optimization

• [ ] Reduce customer concentration below 20% for top client
• [ ] Lock in key employees (retention bonuses, equity vesting acceleration)
• [ ] Eliminate founder dependency — delegate all daily ops
• [ ] Build management team that buyers want to retain
• [ ] Accelerate profitable growth (not growth-at-all-costs)
• [ ] Clean up tech debt, document architecture

Month 12-6: Preparation

• [ ] Prepare Confidential Information Memorandum (CIM)
• [ ] Build detailed financial model with 3-year projections
• [ ] Create data room with all due diligence documents
• [ ] Identify 30-50 potential buyers across all categories
• [ ] Get formal valuation or fairness opinion
• [ ] Tax planning — structure for long-term capital gains

Month 6-0: Execution

• [ ] Launch controlled auction or targeted outreach
• [ ] Manage NDAs and information flow
• [ ] Navigate LOIs — compare structure, not just headline price
• [ ] Due diligence support (expect 60-90 days)
• [ ] Negotiate purchase agreement, representations, escrow
• [ ] Plan transition period (typically 6-24 months)

5. Deal Structure Decoder

Common structures and what they mean for sellers:

| Structure | Seller Risk | Tax Impact | When Used |
|----------|-----------|-----------|-----------|
| All Cash | Lowest | Immediate gain | Strong seller position |
| Cash + Earnout | Medium | Deferred gain | Revenue validation needed |
| Cash + Seller Note | Medium | Installment sale | Buyer financing gap |
| Equity Rollover | Highest | Tax-deferred | PE recaps, strategic mergers |
| Asset Sale | Varies | Ordinary income risk | Liability protection for buyer |
| Stock Sale | Varies | Capital gains | Simpler, seller-preferred |

Earnout Red Flags:

• More than 30% of total value in earnout = risky
• Earnout period >2 years = too long
• Metrics you can't control post-close = avoid
• No accounting standard specified = dispute guaranteed
• Buyer can make decisions that tank your earnout = walk away

6. Tax Optimization Strategies

US Sellers:

• QSBS exclusion: up to $10M or 10x basis tax-free (Section 1202)
• Installment sale: spread gain over payment period
• Opportunity Zone reinvestment: defer and reduce gains
• Charitable remainder trust: donate appreciated stock pre-sale
• ESOP sale: 1042 rollover for C-corp shareholders

UK Sellers:

• Business Asset Disposal Relief (BADR): 10% rate on first £1M
• EIS/SEIS reinvestment relief
• Holdover relief for gift of business assets
• Entrepreneurs' Relief planning (lifetime limit)

7. Post-Exit Transition Plan

Founder Transition (typical terms):

• 6-month transition: light involvement, knowledge transfer
• 12-month transition: part-time advisory, customer introductions
• 24-month transition: full operational handover (PE-backed deals)
• Non-compete: usually 2-3 years, geographic + industry scope

What to negotiate before signing:

• Transition compensation (salary + benefits continue)
• Acceleration of remaining equity/earnout on termination
• Scope of non-compete (narrower = better for you)
• Ability to invest in non-competing businesses
• Personal brand rights (can you still speak, write, consult?)

Industry Exit Benchmarks

| Industry | Median Multiple | Median Deal Size | Avg Time to Close |
|---------|----------------|-----------------|-------------------|
| B2B SaaS | 7.2x ARR | $28M | 6-9 months |
| IT Services | 1.8x revenue | $12M | 4-6 months |
| Healthcare IT | 5.5x ARR | $35M | 8-12 months |
| Ecommerce | 4.1x SDE | $2.5M | 3-5 months |
| Agency/Services | 4.8x EBITDA | $8M | 4-7 months |
| Manufacturing | 5.2x EBITDA | $15M | 6-9 months |
| Fintech | 9.1x ARR | $45M | 7-10 months |

Common Exit Killers

1. Customer concentration — One client >25% of revenue scares every buyer
2. Founder dependency — If you ARE the business, it's worth less without you
3. Messy financials — Commingled expenses, no monthly close, no forecasting
4. Key person risk — Critical employees with no contracts or retention plan
5. Revenue quality — One-time revenue dressed up as recurring
6. Undisclosed liabilities — Tax issues, pending claims, contract breaches
7. Unrealistic expectations — Pricing based on 2021 multiples, not 2026 reality

Resources

• AI Revenue Leak Calculator — Find where your business is losing value before exit
• AI Agent Context Packs — Industry-specific frameworks ($47/pack)
• Agent Setup Wizard — Automate operations to reduce founder dependency

Bundles: Pick 3 Packs $97 | All 10 Packs $197 | Everything Bundle $247