Counterintuitively, making a business hyper-efficient before a sale is not always optimal. Roughly half of buyers prefer acquiring companies with identifiable inefficiencies because improving them is a key part of their own value-creation thesis and justification for the acquisition.
A vast majority of small-to-medium enterprises are priced at valuations their market will not support. This market failure means 8 or 9 out of 10 of these businesses never get sold, trapping their owners—often Baby Boomers—into working long past their desired retirement age.
Successful large-scale acquirers remain nimble, flexing their own processes to suit the acquired company rather than force-fitting it into a rigid corporate structure. This preserves the culture and talent that made the company valuable, preventing value destruction and keeping the new team engaged.
PE investors often fail to unlock a portfolio company's full potential by only interacting at the board level. Engaging deeper with operational leadership is crucial to understand the team's true quality and identify opportunities to transform the value proposition, which are often missed from the boardroom.
When selling a business, owners often underestimate the impact of fees and taxes. Across professional services (lawyers, accountants) and taxes, 93% of owners lose between 30% and 50% of the final sticker price, with the exact amount varying significantly by geography (e.g., California vs. the UK).
Due diligence cannot quantify a team's crucial soft skills. When an acquirer forces change aggressively post-close, they risk an exodus of these skills and key talent, maximizing the chance of the investment failing. A partnership approach that preserves talent for at least the first year is a much safer strategy.
Exponential valuation growth often comes from fundamentally repositioning a product to command a much higher price, not just increasing sales volume. This strategy, which multiplied one company's sale value by over 100x, requires deep market understanding to turn a low-value proposition into a high-ticket one.
A unique "Double and Keep It" model helps business owners double their company's value by using external capital from family offices to acquire other companies. This creates a larger, more attractive group for a future sale, increasing the owner's payout without them taking equity dilution or adding debt to their original business.